Investors maximize returns on certificates of deposit by seeking out limited-time offers, shopping for the best rates and asking about loyalty rewards, advises Investopedia. If rates are low, investment strategies such as laddering and finding low penalties for early withdrawals give options if rates increase.
Limited-time offers require the investor to have cash available to invest before the offer ends, according to Investopedia. With laddering, the investor purchases a one-, two-, three- and four-year CD so that when a bank provides a limited-time promotion, at least one of his investments is near maturity. Similarly, if he purchases a CD with a low penalty, the higher rates overcome any penalty he must pay.
When interest rates remain consistently low, but an investor wants to purchase a CD, he must spend some time shopping for the best rates. In most cases, investors are not able to find these rates at a local bank, according to Forbes. If the investor is ready to change banks for other reasons, the higher rate for new customers can improve the return.
To counteract the draw of online banks, some local ones offer loyalty rewards to existing customers, according to Investopedia. These rewards help to prevent the customer from taking his investment elsewhere during the grace period at the end of the CD maturity by offering a higher than normal interest rate for the next term.