So your certificate of deposit is about to mature. Should you just roll it over at the same bank? If you roll over a certificate of deposit without shopping around, it can be like rolling over and playing dead.

"But what's the point--CD rates are so low," you might argue, "it's not worth my time to try to do a little better." If that's what you are thinking, you might be surprised at how different CD rates can be from one bank to the next. With overall CD rates at low levels, these differences are magnified in importance. Plus, recent changes in FDIC insurance can further raise the stakes.

New FDIC Limits Raise the Stakes

One of the measures Congress took when the financial crisis was reaching a peak in late 2008 was to extend FDIC deposit insurance from $100,000 to $250,000 through the end of 2009. At a time when banks desperately needed to attract capital, this move was intended to encourage deposits, or at the very least head off withdrawals, by giving consumers the confidence to deposit higher amounts with banks.

Understandably though, the limited time period may have given some people pause. You don't necessarily want to make deposit arrangements only to have to remake those arrangements in a year or so. Especially when it came to CDs; this short time frame for the extended coverage tightly limited the options available to consumers. However, more recently, in May of 2009, the additional protection was extended through the end of 2013. This makes it more worthwhile to make deposit arrangements on the basis of FDIC insurance, and in particular opens up the range of CD terms available to you within the covered time period.

Of course, for every additional dollar you can now put into a CD, the reward for finding the highest CD rates goes up.

The Reward for Shopping: Average vs. Highest CD Rates

Again, you could settle for simply rolling your CD over at your current bank, or you could shop around and see if you could do a little better. To give you an idea of what a difference this could make, a recent sampling showed that 1-year CD rates were averaging 1.93% in annual percentage yield. At the same time, the highest 1-year CD rate in the sample was 60 basis points higher, at 2.53%.

A look at 2-year CD rates produced even more dramatic results. The average annual 2-year CD rate was 2.14%, but the highest 2-year rate in the sample was some 73 basis points higher, at 2.87%

What Earning the Highest CD Rates Means in Dollars

Putting this all together, using the figures above, if you took full advantage of the $250,000 FDIC coverage limit, you could earn an extra $1,500 a year just by shopping for the highest CD rates. If you opt for a 2-year CD, you could earn an extra $1,825 per year. Given how quick and easy it is to shop for CDs using online resources, don't you think these amounts would be well worth your time?

Sources:

Deposit Insurance | Updates & Alerts • 0000-00-00 • http://www.fdic.gov • http://www.fdic.gov/deposit/index.html

Find Best CD Rates • 0000-00-00 • http://www.moneyrates.com • http://www.money-rates.com/cdrates.htm?term=17&amount=9999