When applying to the United States, there are two options of applications: Regular Decision (RD), where students apply sometime in January or Early Decision (ED), where students apply much earlier (usually by 1 November). The one caveat with Early decision is that it is binding (and limited to one college) , which means that students sign a contract promising to attend an institution if admitted. Students usually choose to apply ED to colleges that are on their dream list in hopes of having a higher chance of getting into the college. But is applying ED really that beneficial?
The short answer is yes it is! But lets go through this logically. Why do colleges actually offer this option at all? Well, since students bind themselves to the college, they are not only giving up the freedom to choose among future offers of admission but they are also providing colleges with virtually a 100 percent chance of “yielding” them into the institution. This allows colleges to gauge how many students they can take in the future. In fact. some of the most popular colleges in the country take a majority of their students in ED while the reported acceptance rate in popular rankings is calculated on RD acceptance making the colleges look highly selective even though their might a skew in that selectivity.
When you apply to a college, look for how many students they take ED vs. RD because this help you understand your true ability to get in to the college. Even in colleges that take a lot of ED students, the kind of students can be disproportionate towards athletes and legacies than students who truly deserve the position. However, this isn't how every college goes. Students and parents are scared of ED because of the binding clause but it can be very helpful. One concern is financial aid; parents think by binding, colleges give less financial aid. This is completely false. In fact, students who go in ED usually have more generous financial aid package than most RD Students. Additionally, colleges usually break the ED clause if you prove that you can't pay for college. But this also means that you aren't considered in the RD pool of students.
According to Jennie Kent and Jeff Levy, here are some stats about Ivy League college acceptances. This should give a good idea of how much importance colleges give to ED acceptances and how you can plan your college lists.