Jumbo Cd

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• Jumbo Cd Rates 3% Or Better
• Jumbo Cd Rates Wells Fargo

Jumbo Cd Rates 3% Or Better

A jumbo certificate of deposit is a CD that requires a higher minimum balance obligation than that required by traditional CDs. In return, the jumbo CD pays a higher rate of interest.

A certificate of deposit, more commonly known as a CD, is a type of bank account that pays interest in exchange for the depositor leaving their funds in the account until it matures. A jumbo CD functions in the same way, though they require a higher minimum balance to open. Interest rates are usually fixed, though some accounts offer variable rates or “bump-up” features. Jumbo CDs tend to pay higher interest rates than their standard counterparts. Although you can technically withdraw your money before the maturity date, there’s typically a hefty penalty associated with doing so.

• A certificate of deposit is generally seen as a low-risk investment. Two types of CDs are available: basic and jumbo CDs. Both investments work in similar ways. But jumbo CDs require a higher.
• A jumbo CD is a certificate of deposit that traditionally requires a minimum deposit of $100,000. Some banks and credit unions offer jumbo CDs with lower minimums, such as $50,000.

Do you have questions about how to integrate a jumbo CD into your investment portfolio? Talk to a local financial advisor today.

What Is a Jumbo CD?

For all intents and purposes, a jumbo CD is exactly the same as a normal CD. You start by depositing money into the account and, in exchange for leaving your money untouched, you receive a higher interest rate than you would with most savings accounts. Interest is usually compounded in regular intervals (once a day or once a month) throughout the life of the CD.

The main difference between a jumbo CD and a regular CD is that the former typically has very high minimum balance requirements. More specifically, a bank may require you to deposit $100,000 or more at account opening. Interest rates on jumbo CDs are also typically higher than those of regular CDs, which should come as no surprise given the aforementioned minimums.

Pros and Cons of Jumbo CDs

Perhaps the best benefit of a jumbo CD is the fact that you’ll receive a higher interest rate than you would on a normal CD. Since CD rates are already higher than many savings accounts, jumbo CD rates can be especially great.

Jumbo CDs are also a risk-free investment. That’s because they’re insured up to $250,000 by the FDIC. Some jumbo CDs are also offered on a short-term basis, allowing customers with big sums of idle money to earn interest over periods of time as short as a week or a month.

Like any CD, the main drawback of a jumbo CD is the fact that your money is untouchable unless you’re willing to incur a large fee. While those who typically open a jumbo CD are far from short on cash, losing access to as much as $100,000 at once is nothing to scoff at.

Bottom Line

If you have the money to invest in a jumbo CD, it can be one of the best investments you’ll find at a bank. Since they’re available largely risk-free because of FDIC insurance, consider whether they’d be a good fit for your investment portfolio.

Talk with your bank to see what jumbo CD options they have available, if you’re interested in investing.

Banking Tips

• In addition to taking care of your banking needs, you should be investing and saving towards retirement. A financial advisor can help you manage these needs, and finding one doesn’t have to be hard. In fact, SmartAsset’s free tool matches you with up to three financial advisors in your area in five minutes. Get started now.
• CDs aren’t the only way you can grow your savings at a bank. Check out SmartAsset’s list of the best savings accounts to find a savings rate that can help you grow your assets.

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If you have a large amount of savings and want it to grow – but you don't want to chance losing any money to high-risk investments – a jumbo certificate of deposit could be the answer.

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Jumbo CDs work just like any traditional CD: You agree to keep your funds on deposit for a certain period, and, in exchange, you are guaranteed your principal back, plus interest.

'Typically, the time periods range from three months to five years or more,' says Toby Walters, a chartered financial analyst and expert for RetireGuide.com. 'You're guaranteed a rate of return if you leave your money in the CD for that period.'

In general, the longer the term length, the higher the interest rate you receive. However, if you withdraw your funds early, you may be subject to an early withdrawal fee, which can cancel out any interest earnings.

So what makes it 'jumbo'? The differentiating factor of a jumbo CD is not the interest rate or term length, but the deposit amount. Jumbo CDs usually require a minimum opening deposit of $100,000, though some require less.

Pros and Cons of Jumbo CDs

Putting your money in a jumbo CD can help you earn a little extra interest for a home down payment, big vacation or other goal. However, jumbo CDs are not for everyone. Before opening a jumbo CD, consider the pros and cons.

Pros

• Very low risk. One of the biggest advantages of putting your money in a CD is that you're able to earn some interest without exposing it to any risk. You are also guaranteed the interest rate offered by the bank as long as you meet the terms of the account, says Zachary A. Bachner, a certified financial planner with Summit Financial Consulting. Funds are also protected by the U.S. government up to $250,000, as long as they're deposited with a federally insured bank or credit union.
• Better rates. Jumbo CDs tend to offer higher interest rates than regular CDs, though you may also have to commit to a term of three to five years to secure the best rates. 'For investors with large investment portfolios including stocks, jumbo CDs can provide security and comfort when the stock market is unstable,' Walters says.

Cons

• Low growth. Even though you may earn a higher rate with a jumbo CD, the interest rates on deposit accounts are quite low across the board. There's a chance that your earnings won't be high enough to beat inflation. Plus, though jumbo CDs tend to offer higher interest rates than traditional CDs, the difference is negligible on average. 'The difference in annual percentage yields between regular and jumbo CDs is about 0.01%,' Walters says.
• Locked in. Jumbo CDs may not be a great choice for emergency savings or money you will need soon. To earn the specified rate, you have to keep your money on deposit for the full term. 'There is normally a penalty or surrender charge if you try to access the money before the end of the specified term,' Bachner says.

Cautions About Jumbo CDs

Jumbo CDs offer safety and stability for your savings. In general, that's a good thing. But depending on your goals for the money, a jumbo CD may be too safe.

If you're planning to hold onto your savings for a few years or more, you might see better returns by investing in a low-risk bond or exchange-traded fund. 'You're tied into the interest rate offered by the jumbo CD, so if interest rates in general are rising, your money will be locked up in a jumbo CD offering a lower interest rate,' Walters says. That's especially true if you opt for a term of three to five years. If you need access to your money earlier than expected, you may lose your modest earnings to early withdrawal fees.

Also keep in mind that because it's a jumbo CD, a large amount of your money could be missing out on rising rates.

Jumbo Cd Rates Wells Fargo

Finally, you should be careful about keeping too much money on deposit. The Federal Deposit Insurance Corp. insures up to $250,000 per depositor, per institution. So if you have two accounts with a combined balance that exceeds $250,000, the money could be at risk. 'If the bank goes bankrupt, you may not receive further interest, and your initial investment may be at risk,' Bachner says.

Best Jumbo CDs

'For anyone seeking security and knowing that they won't need the money for some time, then jumbo CDs may be suitable,' Walters says, adding that jumbo CDs can be used by investors who want to counterbalance the volatility of stocks in their investment portfolio.

The best jumbo CDs are offered by credit unions, where CDs are called share certificates. To join a credit union, you have to meet the qualifications for membership. Below are the top jumbo CD rates available today, plus how to become a member of the institution offering them.

Superior Choice Credit Union

Rate: 1.4% annual percentage yield

Term: Five years

Who can join: Membership is open to people who live or work in certain counties in Minnesota and Wisconsin. Members of the American Consumer Council are also eligible to join.

Wings Financial Credit Union

Rate: 1.36% APY

Term: Five years

Who can join: Membership is open to individuals who live or work in the following areas (or have a family member who does): eligible Minnesota or Wisconsin counties; the Seattle-Tacoma, Washington, metro area; the Detroit metro area; the Orlando, Florida, metro area; and the Atlanta metro area. You can also join if you or an immediate family member are employed by airlines, government agencies working with the aviation industry, or work at an airport directly with air freight, air courier or air transportation, or are a member of Wings or the Wings Financial Foundation.

SchoolsFirst Federal Credit Union

Rate: 1.1% APY

Term: Five years

Who can join: Membership is open to those who are part of the California educational community, including employees of public elementary and secondary schools, private elementary and secondary schools listed in the California Department of Education School Directory, community colleges and more. You can also join if you're retired from an eligible school and are receiving a pension or annuity from that entity's retirement program, or you are the immediate family member of an existing SchoolsFirst FCU member.

Golden 1 Credit Union

Rate: 1% APY

Term: Five years

Who can join: Anyone who lives or works in California is eligible to join. Nonresidents can also join if an immediate family member is a current Golden 1 member, or if they work for one of its 1,000 select employee groups.

Navy Federal Credit Union

Rate: 0.95% APY

Term: Five years

Who can join: Service members and veterans from all branches of the armed forces are eligible to join, as are their family members. Department of Defense civilian employees may also join.

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