See full list on smartasset.com. Spirit Of Texas Bank 4 Banks & Credit Unions. 4151 Southwest Fwy. West University.
Edward Jones is a brokerage firm you’ve probably heard of over the years as it nears almost a century in age.
Founded in 1922, Edward Jones scores surprisingly well in customer satisfaction—18 points over the industry average, according to a J.D. Power 2019 survey—and is known for being a largely reliable and professional company.
The current suite of brokered certificates of deposit offered through Edward Jones are, for the most part, less competitive than the current national average for their respective terms. Other than perhaps the 10 year CD currently offered through Edward Jones, higher yields can be found directly through online banks and credit unions.
Because Edward Jones is a brokerage firm and not an actual bank they don’t sell their own CDs. Instead, they ‘broker’ or re-sell a range of deposits from other banking institutions.
Are Edward Jones brokered deposits worth considering? Read our full review below.
[Update March 2021]: Edward Jones longer term brokered CD Rates (5 year + terms) continue their slow move upward as bond and treasury yields do the same. Their APYs are now competitive with some of the better offers we see from credit unions and online banks. Their short term yields remain uncompetitive.
Other than the current trend of rising yields for longer terms, brokered CDs have some additional noteworthy features.
For one, you can exit these CDs at any time by selling them through a secondary market which Edward Jones offers. Second, you can spread your funds into multiple banks with Edward Jones as your broker.
Edward Jones CD Rates
All Edward Jones CDs require minimum opening deposits of $1,000. Please note that 3 and 9 month CDs as well as 4 and 7 year CDs are not available at this time.
To give these offers some context, the current national average for a 12 month CD and a 60 month CD sit at 0.14% APY and 0.31% APY, respectively, according to recent FDIC data.
If you’re looking for FDIC-insured alternatives that don’t require you to lock up your money for a predetermined period of time, there are still a handful of online savings accounts providing yields above 0.50% APY. For example, the Axos High Yield Savings account still holds an APY of 0.61%!
Edward Jones Brokered CDs Account Details
A few crucial distinctions must be made between standard CDs and Edward Jones’s brokered CDs.
The most important of these being that you do not open or manage brokered CDs yourself. On top of that, the actual CD isn’t technically a product of Edward Jones at all. Instead Edward Jones purchases a CD for you from one or many different banks in partnership with this firm.
You can open new CDs with Edward Jones or you can purchase secondary CDs.
If you open a new CD with Edward Jones you will not have to pay any commission fees. Edward Jones will receive a concession from the bank that takes your deposit, but this is already factored into the price.
If purchasing a CD on the secondary market, you will have to pay Edward Jones a commission just like you would purchasing stock. You can see what commission they take in the trade confirmation.
A benefit of Edward Jones brokered CDs is that they don’t have early withdrawal penalties. If you need to cash out of your deposit early you can simply sell it to another investor on the secondary market.
Unfortunately, this also means there is an inherent downside to these products in that their price fluctuates on the open market and can feasibly be sold for less than the purchase price.
For example, if you open a 5 year deposit and need the funds after year 2, during which time interest rates have risen considerably, you may have a tough time selling your deposit for your full purchase price.
Conversely, if you purchase a 5 year deposit and rates drop significantly (which they have) then you may find investors willing to offer a premium on your CD on the secondary market.
Also note, interest earned on Edward Jones CDs does not compound. This is true of most brokered CDs as they require an immediate distribution of interest. The terms of your personal CD will tell you how often the interest on your account is credited and where.
Brokered CDs with Edward Jones do not automatically renew.
To open a brokered CD with Edward Jones, you’ll first need to set up a brokerage account with them if you don’t have one already. Edward Jones is a full service brokerage account with no minimum deposit requirements for account opening.
Opening up an Edward Jones brokerage account can be done online, however purchasing an Edward Jones brokered CD can not. For this you will have to go to a local office and fill out the paperwork. They will provide you with a prospectus to look over and discuss your options with you before you make any decisions.
As soon as your initial deposit clears, you are free to buy a new CD or a secondary CD through your Edward Jones broker.
Edward Jones is a member of SIPC and deposit products with this firm are insured up to $250,000 per depositor.
In addition to its extensive suite of investment products and brokered CDs, this firm also offers money market funds and a cash management account.
Edward Jones Money Market Funds
Money market funds offered at Edward Jones, and most other brokerage firms, are not money market accounts. Money market funds are simply liquid mutual funds with good cash access. Money market accounts are federally insured deposit accounts with a guaranteed return of principal plus accrued interest.
Because money market funds are mutual funds with cash access, they do not guarantee that you will receive a full return on your principal.
On top of that, the cash in a money market fund may be used to invest in CDs or other short-term investments, but deposits into these funds are not FDIC insured.
Edward Jones money market funds are available as investment shares and retirement shares – both of these taxable options. You will be charged a $3 monthly maintenance fee for retirement share class money market funds with balances below $1,500 and a $3 monthly maintenance fee for investment share class money market funds with balances below $2,500. Talk with your advisor about cash and cash equivalents available for you to invest in with your money market fund—this will vary.
There is no minimum investment required to open a money market fund and the current 7-day yield per share is 0.01%.
On the positive side, these money market funds make withdrawing and using money simple because they allow you to write unlimited checks and use a Visa debit card. Transactions and withdrawals are unlimited, unlike money market accounts.
Edward Jones Flex Funds Account (Cash Management Account)
An Edward Jones Flex Funds account is a cash management account that earns interest on your uninvested balance.
There is no annual fee and you can write up to 120 checks per year free of charge. This account is insured up to $1.5 million leveraging multiple banks’ $250,000 FDIC deposit insurance using the “Bank Sweep Program.”
With a Flex Funds account, you can set short-term savings goals for yourself and easily track your progress toward them. Your financial advisor can go through the details about how to strategize saving and investing with this account, but you have a lot of options and flexibility overall with a product like this.
Account Set-Up and Management
Edward Jones allows you to make quick and easy deposits into your account(s) and transfer funds electronically. You can enroll in online bill pay and link a direct deposit to one or more of your savings or investment accounts. Mobile check deposit is another feature included on the Edward Jones native apps for both Google Play and App Store. Though poorly rated, the apps are comprehensive and functional.
Edward Jones is a more than satisfactory brokerage firm and its brokered certificates of deposit are [finally] offering some competitive APYs for longer maturities.
As treasury yields slowly climb upward, we expect Edward Jones brokered CD rates to continue their ascent as well.
© Alyssa Powell/Business Insider Alyssa Powell/Business InsiderPersonal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.
Popular Searches
Here are the best CD rates right now:
- Ally Bank: Best CD rates overall
- Ally Bank: Best CD rate for 1-year term
- Discover Bank: Best CD rate for 3-year term
- CIT Bank: Best CD rate for 5-year term
- Ally Bank: Best CD rate for a low minimum deposit/high APY
- Marcus by Goldman Sachs: Best rate for no-penalty CD
- Need more information? Scroll down to read more on how and why we chose the winners and what you should know about each of our picks.
If you want to grow your money but keep it safe from the turbulence of the stock market, a certificate of deposit (CD) may be a good option.
Generally, a CD should be fee-free and as easy to open as any checking or savings account. Since you're locking in an interest rate, it's smart to look for the highest one. But it's also important to consider minimum deposit requirements and penalties for early withdrawals in case you need the money in a pinch.
Below you'll find our picks for the best CD rates right now. There's no CD that will work for everyone, but we combed through offerings at around a dozen national banks as well as popular comparison sites, like Bankrate and NerdWallet, to find the strongest options available right now.
© BI BIAlly Bank: Best CD rates overall
Why it stands out: Ally has more options for CDs than any other online bank, including an 11-month, no-penalty CD with various interest rates for different balance tiers and a variable-rate CD.
Term options: Ally offers a total of 11 different CD term lengths ranging from 3 months to 5 years.
Best rates:
- 1.50% on a 1-year CD, no minimum; 1.60% on an 18-month CD, no minimum
- 1.55% on a 3-year CD, no minimum; 1.50% on a 2-year or 4-year Raise Your Rate CD
- 1.60% on a 5-year CD, no minimum
- 1.65% on a 15-month CD, no minimum. The 15-month CD is a promotional offer. Open your account by July 31, 2020, and it will automatically renew as a 1-year CD at the end of the 15-month term.
Penalties: Ally offers standard penalties for early withdrawals of your principal balance, as follows:
- 60 days interest penalty for a CD term of 24 months or less
- 90 days interest penalty for a CD term of 25 months to 36 months
- 120 days interest penalty for a CD term of 37 months to 48 months
- 150 days interest penalty for a CD term of 49 months or more
Keep an eye out for: Types of CDs. Ally offers three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs.
Unlike regular High Yield CDs, Raise Your Rate accounts offer 2-year and 4-year terms. APRs on these accounts start lower than High Yield CDs rates, but you can increase your APR once over 2 years or twice over 4 years.
No Penalty CDs do not penalize you for early withdrawal, but the APR varies depending on the amount you initially deposit.
Be sure to choose the type of CD that makes sense for you.
© BI BIAlly Bank: Best CD rate for 1-year term
Why it stands out: Ally currently offers the best rate for 1-year CDs. There is no required initial deposit or minimum account balance. Ally's early withdrawal fees are low compared to what similar banks charge.
Rate: 1.50% on a 1-year CD.
Penalty: If you withdraw funds early from a 1-year CD, you'll pay 60 days interest on the amount withdrawn.
Keep an eye out for: Types of CDs. The Ally 1-year High Yield CD may meet your savings needs, but you might discover that another CD is a better fit.
Ally offers three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs.
Unlike regular High Yield CDs, Raise Your Rate accounts offer 2-year and 4-year terms. APRs on these accounts start lower than High Yield CD rates, but you can increase your APR once over 2 years or twice over 4 years.
No Penalty CDs do not penalize you for early withdrawal, but the APR varies depending on the amount you initially deposit.
© BI BIDiscover Bank: Best CD rate for 3-year term
Why it stands out: You can make your deposit now or later when you apply to open a CD at Discover Bank. The minimum balance requirement is $2,500.
Rate: 1.60% on a 3-year CD, minimum $2,500 balance.
Penalty: The penalty for early withdrawal is equal to 180 days of interest.
Keep an eye out for: The minimum balance requirement. You need to be comfortable putting away at least $2,500 for 3 years.
© BI BI CIT Bank: Best CD rate for 5-year term
Why it stands out: CIT Bank currently offers the best rate for 5-year CDs. The bank is known for offering a wide range of CD types, so if you decide the 5-year term isn't a good fit, you'll have plenty of other options with competitive rates.
Edward Jones Money Market
Rate: 1.70% on a 5-year CD.
Penalty: If you withdraw early from your 5-year CD, you'll pay a penalty of 12 months of interest on the amount withdrawn.
Keep an eye out for: Minimum opening deposit. You must have at least $1,000 to open a CD with CIT Bank.
© BI BIAlly Bank: Best CD rate for a low minimum deposit/high APY
Why it stands out: You can open a CD at Ally with $0 down and still earn a competitive rate. The early withdrawal penalty is low compared to what similar banks charge.
Rate: Ally offers a total of 11 different CD term lengths ranging from 3 months to 5 years.
Best rates:
- 1.50% on a 1-year CD, no minimum; 1.60% on an 18-month CD, no minimum
- 1.55% on a 3-year CD, no minimum; 1.50% on a 2-year or 4-year Raise Your Rate CD
- 1.60% on a 5-year CD, no minimum
- 1.65% on a 15-month CD, no minimum. The 15-month CD is a promotional offer. Open your account by July 31, 2020, and it will automatically renew as a 1-year CD at the end of the 15-month term.
Penalty: Ally offers standard penalties for early withdrawals of your principal balance, as follows:
- 60 days interest penalty for a CD term of 24 months or less
- 90 days interest penalty for a CD term of 25 months to 36 months
- 120 days interest penalty for a CD term of 37 months to 48 months
- 150 days interest penalty for a CD term of 49 months or more
Keep an eye out for: Types of CDs. Ally offers three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs.
Edward Jones Cd Rates 2019
Unlike regular High Yield CDs, Raise Your Rate accounts offer 2-year and 4-year terms. APRs on these accounts start lower than High Yield CDs rates, but you can increase your APR once over 2 years or twice over 4 years.
No Penalty CDs do not penalize you for early withdrawal, but the APR varies depending on the amount you initially deposit.
Be sure to choose the type of CD that makes sense for you.
© BI BIMarcus by Goldman Sachs: Best rate for no-penalty CD
Why it stands out: Marcus by Goldman Sachs offers 3 different terms for its no-penalty CD, which allows you to withdraw your total balance at any time during the term beginning one week after funding.
Rates: 1.35% on a 13-month, no-penalty CD; 1.45% on an 11-month, no-penalty CD; 1.55% on a 7-month, no-penalty CD. Minimum deposit requirement for all terms is $500.
Penalty: None.
Keep an eye out for: The minimum deposit requirement. You need at least $500 to open the account.
Other CDs we considered and why they didn't make the cut:
- Synchrony Bank: While Synchrony Bank's 5-year CD offers a 1.65% APY, which is higher than Ally's, it requires a $2,000 minimum deposit. Ally has no minimum deposit.
- American Express: This bank doesn't require an initial deposit, and your rate can be competitive depending on how long your term is, but American Express charges high early withdrawal penalties.
- Capital One 360: Capital One CDs require no minimum balance. Rates are competitive, but they're unique — as your term lengthens, your rate decreases. Most competitors' rates increase as your term lengthens.
- Citizens Access: Citizens Access offers high APYs on its CDs, ranging from 1.50% to 1.65%, but all terms require a minimum deposit of $5,000.
- Sallie Mae: The rates on Sallie Mae's CDs are as high as 1.35%, but the minimum deposit to open an account is $2,500 and there isn't a no-penalty CD available.
- HSBC Direct: HSBC's CD rates were relatively high, but they've dropped to 0.75% for 6-month terms and 0.80% for 1-year and 2-year terms.
- PurePoint Financial: PurePoint's rates are on par with the best CDs on our list, but its $10,000 minimum deposit could be a major drawback for more modest savers.
- Barclays: You'll earn a decent APY with Barclays, and you can start with no opening deposit. However, you do have to fund the CD within 14 days to keep it open.
- Chase Bank: While Chase has some truly excellent rewards credit cards, the rates on its CDs do not compete with any of the banks on our list.
Frequently asked questions
Why trust our recommendations?
Personal Finance Insider's mission is to help smart people make the best decisions with their money. We understand that 'best' is often subjective, so in addition to highlighting the clear benefits of a financial product or account — a high APY, for example — we outline the limitations, too. We spent hours comparing and contrasting the features and fine print of various products so you don't have to.
How did we choose the best CDs?
We reviewed CD offerings from around a dozen national banks. All banks included on our list are insured by the FDIC and do not impose monthly maintenance fees on CDs.
In the event two banks offered the same APY on a CD product, we considered minimum deposit requirements and penalties for early withdrawals.
For this list, we did not consider credit unions — though they tend to offer high interest rates on savings accounts and CDs, many limit membership to people who work in a specific industry or live in a designated area.
What is a CD?
A CD is basically a time-sensitive savings account that holds your money at a fixed interest rate for a specified period of time. You can open one at almost any bank or credit union.
If you don't need immediate access to your savings, a CD can guarantee a return on your money since you lock in a fixed annual percentage yield (APY) for the term of the CD. During that period, you typically won't be able to add additional money or access your original balance without paying a penalty.
You will, however, earn interest on the amount and have the option to collect those payments monthly or reinvest them into your CD. Most banks offer varying rates for different terms and deposit amounts — typically, the longer the term, the higher the rate.
At the CD's maturity date, you'll typically have a 10 to 14-day grace period in which you can withdraw your money and close the account or renew the term.
Are CDs safe?
CDs are safer than investing your money in the stock market but may be less liquid than a savings account. CDs are a good place to store and grow money that you will need at a predetermined future date. While your money doesn't have the potential to earn as much as it would in the stock market, there is no risk.
Like savings accounts, CDs are insured by the FDIC for up to $250,000.
Are CDs a good investment?
Timing matters. CDs can be a good investment if interest rates are currently high and/or expected to fall. The biggest benefit of a CD is your ability to lock in a fixed interest rate. If interest rates fall during the term of your CD, the APY on your CD will not be affected. Conversely, if rates are expected to rise, then it may not be a good time to put money in a CD.
Can you lose money in CDs?
You cannot lose money in a CD if you leave it untouched for the full term length. It is like a locked savings account and the only way you can lose money is if you make an early withdrawal for which you are penalized.
Are CD rates going up?
Interest rates on CDs follow the federal funds rate, which is determined by the Federal Reserve. Since July 2019, the Fed has reduced interest rates three times, which means rates probably won't drop for another several months, if at all.
Read the original article on Business Insider