uccess With Money
uccess With Money
Your Personal Guide to Achieving Success With Your Money and Your Life
When it comes to saving money, there are many investment choices. One popular offering is the CD, or certificate of deposit. It is important to know about this opportunity since there are many investment occasions when this may represent an excellent choice.
A Certificate of Deposit is an interest bearing deposit which in contrast to a general savings account is based on a set amount of money for a set period of time with a set (ordinarily) rate of interest. Minimum deposits may vary from institution to institution but begin typically at $500.00. Time spans usually run from three months to five years.
Advantages of CD's
Disadvantages of CD's
Here are a few pointers to keep in mind when considering CD purchases.
Rates vary corresponding to variations in a number of factors, most significantly the length of time commitment. Don't assume that rates are higher for longer terms, though; rates vary up and down over the months involved depending on the bank's needs.
It is also valuable to know that offerings vary widely from bank to bank. Often smaller, local banks may present better opportunities (ie. higher rates) than larger, more widely known ones. And individual banks fluctuate in need on an individual basis. The bank offering the best rates one week may not do so the next week, and vice versa.
Individual offerings may include advantageous opportunities for improving yield, too. For example, sometimes they feature the ability to add to the deposit at some time later during the investment period. If rates generally have been declining and you can add to an existing CD at the previously established rate this could amount to a valuable benefit.
