A certificate of deposit, or CD, is a great savings option, particularly for people who are risk adverse. A CD pays a higher interest rate than a regular savings account and they can be federally insured like a regular savings account. The term length varies and you get to choose how long a term you want, the term can range from three months up to 20 years. Basically the longer the term is the higher the interest rate. The problem with having a long term account is that if for any reason you need to access your money before the term is over you can pay penalty fees and lose a considerable amount of interest. There is a banking website called bankrate.com which compares the interest rates of financial institutions so this website can help you to find the best certificate of deposit with the best rates.
Don't just rush in to any certificate of deposit; there are some questions that you should ask before going ahead:
Don't just rush in to any certificate of deposit; there are some questions that you should ask before going ahead:
