3 Great CDs to Check Out in August

Most experts are all but certain that the Fed will reduce interest rates in September. If that's the case, then now is the best time to lock in CD rates before they also drop next month.

There are still a ton of great banks offering high-yield CDs, though the top rates will be for shorter terms. Take a look at these three highly competitive offers to see what kind of rates you can get right now.

1. LendingClub CD: 10-month, 4.00% APY

The APY on LendingClub's 10-month CD is one of the highest I've seen lately. It also happens to be the longest term on this list, so you'll have your rates locked in until next summer.

LendingClub's other CDs are also pretty competitive (for their terms) if you're interested in a longer-term CD.

2. Discover® Bank CD: 9-month, 4.00% APY

It comes with a slightly lower rate and a slightly shorter term than our first pick, but Discover's 9-month CD is still extremely competitive. Plus, it's backed by Discover's award-winning customer satisfaction ratings.

Discover's other short-term CDs also have relatively competitive rates, but I'd shop around a bit if you're interested in something with a term over two years.

3. Quontic CD: 6-month, 3.75% APY

This pick is another that's right up there at the front of the pack in terms of the rest of its competition. It also has the lowest minimum deposit amount of the CDs on this list ($500), making it the most attainable for folks all along the savings spectrum.

The minimum deposit requirement for Quontic CDs is pretty good, but it does have another drawback: really steep early withdrawal penalties. These can eat into your earnings pretty severely, so definitely stick with the short-term CDs if you might need your money soon.

How much you can earn with $2,500

The plus side of these being short-term CDs is that it's easier to tie up your $2,500 if you know you'll get it back in a few months' time -- with interest.

Curious just how much interest you can expect to earn? Take a look at some estimates for CDs of similar terms and rates.

As expected, you'll maximize your return if you also maximize rate and term length. But even the 6-month CDs produced a very respectable return at every rate.

How to pick a new CD

There are a lot of variables that go into optimizing CDs. However, the average consumer can simplify the process by answering three simple questions:

1. How much money do you have to invest? As above, most CDs have a minimum deposit requirement that you'll need to meet. If you have a smaller amount to invest, some CDs may not be available to you.
2. How long can you live without it? CDs have harsh penalties on early withdrawals. If you might need your money soon, stick with short-term CDs that will mature quickly.
3. What's the best rate you can find? Finally, aim to get the best rate you can find. This will maximize your return.

If you're hesitant about the idea of tying your money up in even a 6-month CD, consider a high-yield savings account instead. You won't have the same locked-in interest rate, but APYs can be competitive and a good account will offer 24/7 access to your money with no fees.