For the individuals that prefer to invest a large lump sum of money into CD account, it would be a wise decision to do so in a jumbo CD. This particular account is set up for larger sums of money, for example a company could invest a million dollars in a jumbo account CD for a low risk. Before you place your money into a jumbo CD account, you should know the minimum amount of money that is required for the account, as well as the term and interest rate. Be sure that you fully understand exactly how often your money will have the interest compounded.
The rates on these CD accounts will vary widely. This depends mainly on the length of the CD as well as the amount of money that has been placed into the account. Typically the highest interest rate for a jumbo CD account is around 5.32%, yielding a 5.45% annually. The interest rate has risen recently, leaving behind the 5.09% that was common just recently. The rate on a jumbo CD account is generally lower than the annual yield due to the compounding of interest into the CD account.
The vast majority of financial institutions that offer jumbo CD accounts offer a compounded interest on the money on a monthly basis. However, there are also many institutions that are offering quarterly interest. The way to make the most profit of interest in your money is to have the interest compounded more frequently. The more the interest has been compounded, the larger the payoff in the end, which gives a higher yield.