Bread Savings CD Rates: Experience Over 5% Return on Investment

**Earn More on Your Savings with High APYs**

Over the past 17 months, the Federal Reserve has increased its benchmark rate 11 times to combat inflation. As a result, yields on various financial products such as money market accounts and certificates of deposit (CDs) have risen. This gives savers the opportunity to earn more on their savings, with the federal funds rate currently sitting between 5.25% and 5.50%, the highest it has been in over 20 years.

**Lock in a High Yield with 1-Year CDs**

If you’re looking to take advantage of these high annual percentage yields (APYs) but don’t want to commit your funds for too long, there are several 1-year CDs available with rates that surpass 5%. For example, Bread Savings is currently offering a 5.35% APY on its 1-year CD.

**Bread Savings CD Rates at 5.35% APY on a 1-Year CD**

Bread Savings provides a 1-year CD with a competitive 5.35% APY, which is more than three times the national interest rate for a 12-month CD. Additionally, Bread CD accounts are FDIC-insured, ensuring the safety of your money up to $250,000.

**Key Facts**

– Minimum deposit: $1,500
– Term length: 1 year
– APY: 5.35%
– Compounding frequency: Interest is calculated daily and credited monthly
– Early withdrawal penalty: 180 days worth of simple interest

In order to start investing in a Bread Savings CD, a minimum deposit of $1,500 is required. As an online-only bank, Bread Savings does not have physical branches, so the account must be opened online. During the application process, personal information such as name, address, and Social Security number will be required. Additionally, you will need to link another bank account to fund your CD.

After the CD reaches maturity, it will automatically renew unless you choose to opt out. Existing customers may be eligible for a special APY CD renewal rate; however, this rate is subject to change. Currently, the renewed 1-year CD offers an APY of 5.40%.

It’s important to note that withdrawing funds early from a CD means missing out on the potential of compound interest. Should you decide to withdraw early, you will be subject to an early withdrawal penalty equivalent to 180 days worth of simple interest.

**Is the Bread Savings 1-Year CD Right for Me?**

Before investing in the Bread Savings CD or any other CD, it’s crucial to assess your investment time frame and financial goals. CDs require a fixed amount of money to be invested for a specific period of time. Therefore, it’s essential to avoid investing funds that may be needed before the CD reaches maturity.

For instance, if you are saving for a vacation to be booked in a year’s time, a 1-year CD could be a suitable option. It can discourage you from accessing your funds early while earning additional interest upon maturity. However, if you require readily accessible cash for an emergency fund, a 1-year CD may not be the most suitable choice.

**4 Factors to Consider When Comparing CDs**

When comparing different CDs, there are four key factors to consider:

1. Minimum deposit: The minimum amount of money required to open a CD. Ensure that you have sufficient funds to meet the minimum deposit requirement.

2. Term length: This indicates how long it will take for a CD to reach maturity, allowing you to receive the principal amount and any earned interest. Select a CD that aligns with your investment horizon to avoid early withdrawals.

3. APY or annual percentage yield: This percentage represents the amount of interest earned in a year. Typically, longer-term CDs offer higher APYs, while shorter-term CDs offer lower APYs. However, exceptions to this trend do exist.

4. Early withdrawal fees: These fees are incurred if you withdraw funds before the CD reaches maturity. Typically, the fees amount to a few months of interest. Pay close attention to these fees, as early withdrawals could result in forfeiting some or all of the earned interest.

**The Takeaway**

Bread Savings’ 1-year CD with a 5.35% APY provides a solid choice for investors willing to lock their funds away for at least a year. However, for those with shorter or longer investment horizons, there are also 6-month, 3-year, and 5-year CDs offering APYs above 4% available in the market. Before making any CD investment, it is imperative to consider early withdrawal fees and minimum deposit requirements.