Certificates of Deposit
One of the safest possible investment
choices you can make. A
Certificate of Deposit (CD) is an ideal tool for earning a good rate of
interest while incurring virtually no risk. Because every portfolio should
contain some cash (many experts say about 20%), CDs can be a good way to
keep those essential dollars safe while they earn interest. Minimum
deposit to open a fixed-rate CD is $1000.
your Certificate of Deposit today.
CD Terms Available - 182 Days to 60 Months
Minimum Opening Deposit - $1,000
Early Withdrawal Penalty may apply
a Certificate of Deposit Works
When you purchase a CD, usually in amounts of $1000 or more, you must agree to leave your
funds on deposit for a predetermined amount of time. It is likely that you
will get a higher interest rate by making a longer time commitment, so if
you think current interest rates are favorable, it is probably wise to
choose a longer duration CD to lock them in.
If current rates seem low to you, you
might decide to invest for a shorter period, hoping that there will be an
interest rate hike soon.
In shopping for
rates, keep in mind that the way interest is compounded is crucial in
determining what your annual percentage yield (the amount you earn, as a
percentage of what you have invested) will be. Look for CDs that
pay compounding interest
Compounding interest means that each time your
CD earns interest, that money is added to your principal and
begins earning interest as well.
of a Certificate of Deposit
Your funds are insured, up to the maximum
extent allowed by law. You generally will earn more than you would in
other types of savings accounts. You pay no sales charges or broker fees.
Once you are locked into a CD, whatever happens in the economy, including
interest rate drops, will not affect you.
If interest rates rise, your money is
still locked in at the lower rate. If you need to gain access to your
money before your CD comes due, you may pay an
penalty. CD interest is taxable.