Yankee Certificate of Deposits (CDs) are banking products issued by foreign banks and offered primarily to larger US investors. These CDs provide investors with the security and flexibility of a certificate of deposit but with shorter maturity periods than regular CDs, often less than one year. Loyalty to the foreign bank is rewarded in higher interest rates, commonly up to two points more than competitive domestic CD rates.

Unlike a traditional certificate of deposit, the funds in a Yankee CD can not be accessed or withdrawn without likely facing steep early withdrawal penalties. However, it should be noted that principal is typically guaranteed when held to maturity. That’s because the issuing bank wants to ensure the investor can cash in their investment when its term expires.

Yankee CDs are an ideal choice for investors looking for high yields with minimized risk, especially those seeking short term investments that also provide flexibility. Typically, short term Yankee CDs may provide yields in excess of a regular CD by two to three percentage points, making them an attractive option for larger investors.

In summary, Yankee CDs are a great savings vehicle for larger investors seeking higher yields on a secure and flexible investment with shorter timeframes. These CDs offer the market-linked returns of a traditional certificate of deposit with the added bonus of higher interest rates, despite the penalty associated with early withdrawal.