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These days, banks offer low-interest CDs, making it hard for savers to maximize their earnings without taking on a lot of risk. Fortunately, jumbo CDs offer an appealing option for individuals looking to earn higher yields than traditional CDs and bank savings accounts.

Jumbo CDs are CDs with large initial deposits. To qualify for a jumbo CD, the deposit must typically be over $100,000. These CDs tend to have higher interest rates than regular-sized CDs and may also come with higher interest rates than other types of savings accounts.

The main attractive feature of jumbo CDs is their high interest rates, and these rates often are significantly higher than those on standard CDs. This is because financial institutions view the large deposits as less risky. Banks also benefit from the large deposit because it allows them to deploy the funds into higher-yielding investments.

Beyond the higher interest rate, jumbo CDs offer several advantages compared to other types of investments. Jumbo CDs are highly liquid, so you can get your funds back at any time without penalty. And because these CDs typically have a long-term horizon, they are an excellent way to save for retirement, major purchases, and long-term goals.

In addition, jumbo CDs are FDIC insured, so you don’t have to worry that your funds will suddenly disappear due to market downturns or economic turmoil. And, if you’re looking for a tax advantaged way to grow your money, a jumbo CD is an excellent choice, as long-term CDs can earn interest over several years without being taxed at each stage.

Overall, jumbo CDs can benefit savers by offering higher interest rates, greater liquidity, and potentially advantageous tax treatment. Though they require a larger upfront investment, jumbo CDs may be a great way to make the most of your savings and achieve your long-term goals.