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A nine-month certificate of deposit — or CD — can let you earn interest at a fixed rate for a low-risk, predictable return. But you’ll face steep penalties if you need access to your money early.
Top CDs with 9-month terms
How does a 9-month CD work?
A CD is a type of savings account that keeps your money locked away for a set period of time, or term. You can’t access the money in the account until the term has ended — this is called reaching maturity. If you do need to access your money early, you’ll have to pay a penalty fee which can eat away at some or all of your interest.
You can choose how long your term will be when you open the account, anywhere from one month to five or more years.
How does interest work on a 9-month CD?
CDs offer a fixed interest rate, meaning if you opt for a 9-month term, the rate won’t change until the end of the term.
The most competitive CDs will compound interest daily, which means that you earn interest on your interest. But this isn’t always the case, so check the terms of the account you’re interested in.
Should I open a 9-month CD?
If you’re saving up for a purchase you plan to make in about nine months, it’s the perfect option.
If you know that you can live without access to your savings for longer than nine months you may want to consider a long-term CD, as longer terms generally offer better interest rates. In some cases the difference in interest rate can make a substantial difference in your savings.
If you aren’t confident you can lock your savings away for nine months without needing to make a withdrawal, perhaps consider a shorter option instead, like a 6-month or 3-month CD.
How do I compare the best 9-month CDs?
To optimize your savings plan, compare CDs based on:
- Interest rate. Interest rates will vary from bank to bank. A high interest rate that compounds daily will help you grow your money the most.
- Minimum balance requirement. Some banks will allow for a CD to be opened with $100 while others require $1,000 or more to open an account. Look for an account with a minimum balance that matches your savings plan.
- Fees. Most CDs won’t have monthly fees, but you likely will have to pay a fee if you withdraw money early. Check how steep the penalty fees are before choosing an account — especially if there’s a chance you’ll need access to the money in an emergency.
- Account type. Are you more comfortable opening a CD account online that lets you check on its progress from an app, or would you rather open an account in person so you can talk it over with someone at the bank?
Is a 9-month CD safe?
Yes, your deposit of up to $250,000 at any FDIC-insured banks is backed by the US government, which means your money is safe from hackers, thieves and banks that go out of business.
What happens when my CD matures?
Unless you inform the bank before the account matures that you intend on withdrawing your savings, they will likely roll your money into a new CD for an additional nine months, possibly at a new interest rate.
The interest rate offered plays a big role in your return on investment, so it’s important you compare CD options again before simply allowing your savings to roll over into a new one with the same bank.
Pros and cons of a 9-month CD
- Higher interest rates than savings accounts. CDs generally offer more competitive rates than other savings products.
- No monthly fees. There are no opening or monthly fees with most CD accounts
- Extra incentive to save. For some, having savings in an account where the funds cannot be touched without penalty is the perfect incentive to develop good saving habits.
- Can’t access your money. If you need to access your money early, you’ll have to pay a penalty fee that cuts into some, or all, of your interest.
- Lower interest rates than long-term CDs. If you’re able to commit to a longer term, like a one-, three- or five-year CD, you can get a better rate.
How did we choose the best CDs?
Nine-month certificates of deposit are a safe way to lock away your money for less than a year while still potentially earning more interest than a standard savings account. And while the interest rate certainly plays a large role in determining which account is best, it’s not always the most important factor. In order to highlight which 9-month CDs are worth opening, we looked into account details using the following criteria: APY, deposit requirements, interest compounding, renewal bonus, early withdrawal penalties and fees.
A nine-month CD can offer competitive rates for a short-term savings plan. But if you want a higher interest rate and can leave your money untouched, you may be better off with a longer term rate. Compare other CD options to learn what rates you can get with a different term length.
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