1. Traditional Certificate of Deposit Rates
In a traditional CD, a fixed amount of money is deposited, for a specified time period and thus you earn a specific rate of interest accordingly. The best cd rates are availible all over the web. When the maturity date arises, you can either cash out the CD or you could renew it for another year. Most banks will allow you to add additional money during the term or when you roll it over for another term. You must not try to withdraw the money before the end of the term. If you do so, then you will have to face a harsh penalty and this will lead to the loss of interest amount .

2. Bump-up Bank Interest Rates
If you feel that the rates are rising up and you would not prefer to commit your money at this point of time, in such a case, a Bump - up certificate of deposit would be just meant for you. This type of certificate allows you to take advantage of those times when there is a rise in interest rates.

3. Liquid
In a liquid CD, the consumers gets an opportunity to withdraw money from the CD without penalties. You will have to maintain a minimum balance in the account. The interest rate will usually be higher than a traditional CD of the same term and minimum. Federal Law says that the money should stay in the account for seven days before it can be withdrawn without penalty. Also, there will be limitations placed on the number of withdrawals per term.

4. Zero Coupon
The word “coupon” actually means an interest payment. Hence, zero-coupon CD indicates no interest payments CD. The zero-coupon CD functions the same way as a zero-coupon bond, there are no interest payments. You buy the CD at a deep discount to the par value- the amount you receive when the CD matures.

5. Callable CDs
If a CD is issued on a callable basis, the bank has the authority to “call” on it after the pre-set call- protection expires, but before the actual CD maturity date. Since it is you who is assuming the interest rate, the bank will usually pay a quarter to half a percent more on callable CD’S than traditional CD’S.

6. Brokerage CD
Brokerage CD’S are sold through a brokerage. Banks often use brokers as sales representatives to locate investors who want to purchase CD’S. The only way to be sure that you will receive your full principal and interest is to hold the CD until it matures.

While looking at the statistics, one will find out that some trends with regards to the previous CD rates have remained constant. Usually, institutions that offer the facility of CD, offer higher rates of interests for CD’s that are made on the basis of maturity period rather than on CD’s wherein the investor can withdraw the money at any given time. For instance, a popular Government Bank had offered an annual interest rate of 0.4% on savings account deposits as compared to the high interest rate of 0.8% on a 3 month CD and as high as 2% on a 2 year CD.

As per the statistics for the CD rates, the trend indicates that over the last 3 decades the rates on interest on CD’s were ranging from 2% to 16% annually. During 1979, the average rate of interest, before considering tax rate and inflation rate, on CDs was 11.44% worldwide. Interestingly, in the same year the interest rates for CD’s fluctuated from a high rate of 66% to as low as 13%. Due to this fluctuation, at the end, the net rate of interest of CD dropped to 9.41%.

Going back to the year 1981, the CD rate was almost 16% and in the same year the tax rate and inflation rate were 66% and 9%. All these factors have influenced in such a manner that the net rate of return on CD reduced to 3.5%. During 1986, the gross interest rate was only 6.6%. The tax and inflation rates were also comparatively low during this year and they varied from 52% to 1.1% . Owing to this, the number of deductions on the CD were reduced which further resulted in the net rate being 2.02%.

Irrespective of the previous rates, billions of dollars have still been invested in CD’s during the 20th and 21st centuries. In order to choose the best option of investment, you need to consider your goal and keep ion mind the rate of interest you are likely to earn at the end.

Money market rate accounts are now known as the most well known place for investors to place their money. As of February 2007, worth of fund reached for investors is 2.3 trillion dollars. Funds on money market rates are invested in short-term debt securities of financial agencies in the government, corporations, treasury bills, and banks of United States. They are stable at $1 per share, yielding on changes.

Banks encourage you to participate on many money market funds prone to investors, because these funds are giving benefits that checking, saving and CD’s account can’t break including:

Highest Liquidity
Money market rates are well known for their high liquidity. Unlike Certificate of Deposit accounts, you can withdraw the money automatically. Compare this to certificate of deposit accounts that charge penalties for early withdrawal. Taking out your money from the money market account impose any penalties. You can also issue checks from your money market rate account, three times a month.

Low Risk
Funds on money market rates are not insured by FDIC, but they’re guaranteed to be secured because they are retaining safest investment funds such as T-bills. Debt securities on government are also considered to be secured since the government itself has the capacity to produce funds to meet its quota. It is actually untrue to lose your investment in money market rate funds. Generally, companies holding mutual funds backed up some insurance to protect your capital.

Competitive Processes
Your saving account as well as checking account will undergo very hard time breaking the productive effort of money market rates. Funds on money market pay you back with a 4-6 percent every year, which compete the return of certificate of deposits. Calculation of interest is done everyday, but pays you out at the end of the month. However, payment is automatic if you sell or traded your fund.

When you choose for a CD, it is better to choose a high CD rate that offers the best interest for the term of the CD and the amount you intend to deposit in the CD. To help you find the interest rate of the CD, there are numerous CD rate calculators on the internet that will help you find the CD rate for your CD.

It is very easy to use a CD rate calculator. All you have to do is to first choose the CD rate calculator using search engines on the internet. Once you find a CD rate calculator, you just have to furnish some information where you will be able to calculator your CD rate.

The most important piece of information you have to provide for the CD calculator is the initial deposit you intend to make for the CD, and its starting balance. You then have to enter the length of your CD term. This may range from five months to five years; it is up to you to decide how much money you can afford to keep aside for the term of the CD as you will not be able to withdraw any money until the termination of the CD.

You then have to provide the published interest rate for the CD and the Annual Percentage Yield that the CD earns. This APY depends on the frequency of compounding of the CD and its interest rate. With the APY offering the actual interest you accrue in a year, you will be able to compare CDs of different interest rates and compounding frequencies.

You can also use the CD rate calculator to find out the frequency of compounding of your CD. The more frequent is this compounding of interest, the faster will your accumulated interest gain additional interest for you. It may sometimes seem better to check with your financial institution to find how often interest is compounded to your CD.

Although these CD rate calculators found on the internet are effective in helping you decide on the right CD to make, it is always better to consult your financial counselor or your bank for information on the best CD rate for your CD.