10 Best CD Rates for Nervous Investors

NEW YORK (RateWatch) – The Federal Reserve’s decision to keep interest rates near zero is good news for would-be borrowers (or at least, borrowers who can get approved), but it only adds to the woes of certificate of deposite investors. According to BankingMyWay, the average 12-month CD currently pays out a measly 0.4% in interest – barely worth the trouble.

But just because your neighborhood bank is probably paying out less than half a percentage point for a 12-month CD doesn’t mean that that’s the rate you’re stuck with. Several online banks offer CD rates above the national average, and consumers anywhere can take advantage of them.

Like traditional banks, online banks are FDIC-insured. However, that insurance only covers up to $250,000, and as we’ve previously reported, if a failing bank is taken over by another institution, there’s an outside chance the terms of your CD could change. As such, here are the top 12-month CD rates you can get right now from online banks, according to RateWatch, along with the bank safety grade from TheStreet Ratings.

1. Alostar Bank of Commerce (Nexity Bank)
Rate: 1.27% APY
Bank Grade: E-
Terms: $1,000 minimum balance

2. Eloan.com (Banco Popular North America)
Rate: 1.26% APY
Bank Grade:  D-
Terms: $10,000 minimum balance

3. Discover Bank
Rate: 1.2% APY
Bank Grade: C-
Terms: $2,500 minimum balance

4. Ally Bank
Rate: 1.19% APY
Bank Grade: C
Terms: No minimums

5. VirtualBank (Lydian Private Bank)
Rate: 1.16% APY
Bank Grade: E
Terms: $10,000 minimum balance

6. Doral Bank
Rate: 1.15%
Bank Grade: D-
Terms: $1,000 minimum deposit

7. GiantBank.com (Landmark Bank)
Rate: 1.11% APY
Bank Grade: D-
Terms: $2,500 minimum deposit

8. Bank of Internet USA
Rate: 1% APY
Bank Grade: B
Terms: $1,000 minimum deposit

9. First Internet Bank of Indiana
Rate: 1% APY
Bank Grade: D
Terms: $1,000 minimum deposit

10. American Express Bank
Rate: 0.9% APY
Bank Grade: B-
Terms: No minumums