Beware of the Hype: Avoid These CD Mistakes, Advises Pro

While some financial institutions are offering CDs with high annual percentage yields (APYs) of 7% or more, experts caution investors not to believe the hype. These rates are often promotional and come with numerous restrictions, making them less appealing than they initially seem. Smaller institutions are more likely to offer these high APYs as they compete for business, while larger banks have all the deposits they need. Average yields are a better indicator of where to invest larger amounts of cash. Additionally, many special CD rates auto-renew into standard CDs with lower rates, potentially leaving depositors disappointed.