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A certificates of deposit, or a CD is a terrific tool to use to grow your money free of any true risks. A CD is insured just the same way a savings account is, but a CD often offers a higher yield. A CD has a fixed term rate, and generally has a fixed interest rate yield. A consumer should always stay up to date on current options available to them via the CD.

It has never been easier to check CD rates nationwide or in your own area than it is now. Bankrate provides an overall national average of different term CD rates and provides local averages and top-yielding local rate information. The site is a great tool to use to stay current on CD rates.

The current CD picture is a pretty good one for the consumer. Currently 6 month CD rates average about 4.58%, while one year CD rates are averaging 4.88%. The highest yielding one year CD is through Virtual Bank online, and it is yielding 5.55%, with a minimum deposit of $10,000. Most banks only require on the order of $2,500 or $5,000 for certificates of deposit. IndyMac Bank in California is offering a great 3 month CD rate of 5.46%.  

One difference between today's CD rate picture versus the one from a few years ago is that there are more impressive short-term CD rates. In fact, many banks are now offering higher yields on 6 month and 1 year CD's than 3 or 5 year CD's. Why is this? There are a couple reasons for this interesting development. Banks are likely believing that there is a good chance that interest rates are likely to come down, so they do not want to let consumers lock in to a CD paying a very high yield when interest rates are dropping quickly. Thus the bank offers high yields for the short-term since they have a better idea of the interest rate picture in that time period. The other possible cause of this development is that more and more consumers are looking to the short-term CD, and this has become the more competitive area for banks to try to get customers. The bank yield war so to speak has moved from longer term CDs over into the short-term CDs.

Currently CD rates are beginning to drop slowly, so it would likely be wise to lock in a CD soon if you are considering this investment. The Federal Reserve's next move on interest rates is likely to be down, which will put downward pressure on CD rates in the future.