Looking to save money for a family vacation? A down payment on a car or house? Or even a kid's college fund? Investing in a Certificate of Deposit is a low-risk option to save and earn money.
Our Benefits on
Certifcates of Deposit
Guaranteed Rates of Return
Multiple Term Options
Low Deposit Requirements
Why should I save?
Because it just makes cents!
When it comes to investment products, Certificates of Deposit are often a dependable and safe choice. They provide a guaranteed return over a specific term. When you invest, it is important to understand the details and avoid common mistakes. Let’s break down the benefits and mistakes to avoid, but first, let’s look at some practical ways to use Certificates of Deposits.
| Vacation | Holiday | Future Purchase |
|---|---|---|
| Open a 9-month CD in January for a September vacation | Open a 12-month CD in December for next Holiday Season | Open a 24-month CD for your future downpayment |
What is a Certificate of Deposit?A Certificate of Deposit is a savings product where members deposit a set amount of money for a set term. Terms typically range from a few months to several years. In return, the financial institution pays a fixed rate of return on your initial deposit. At the end of the term, the member receives the original deposit plus the accumulated interest. A “Certificate of Deposit”, CD, is a low-risk investment for steady return.Benefits of Certificates of DepositMost financial institutions offer a wide range of term lengths to choose from, typically ranging from 3 months up to 60 months. One of the main benefits of a Certificate of Deposit is the predictability of return during these terms. Minimum deposit requirements can vary depending on the term and initial deposit you would like to make. Most institutions may require around $1,000.00 deposit or less to open a Certificate of Deposit. They may offer larger options like Jumbo Certificates of Deposit with minimum deposit requirements of $100,000.00 or more and tend to earn a bit higher rate. Your deposits will be federally insured by the National Credit Union Administration (NCUA) or Federal Deposit Insurance Corporation (FDIC) up to $250,000 per member/depositor, per institution.Mistakes to Avoid
Early Withdrawal Penalties – One of the biggest errors made by investors is withdrawing money before the certificate matures. Most institutions impose a penalty for early withdrawals, which can reduce or even eliminate the earned dividends. So, before investing funds into a share certificate, consider your liquidity needs first.
Rates and Terms – Not every Certificate of Deposit is the same, the rate and term tend to vary at each financial institution. Each financial institution may offer completely different terms, perks, and rates. Failing to shop around can result in lower returns than anticipated.
Assess Investment Needs – Your financial goals may change over time. You must examine your investments often to ensure they meet your financial plan. Your Certificate of Deposit may mature and renew at a current-to-date rate. Certificates of Deposit are predictable, safe, and earn a guaranteed return, which is a great part of supporting a conservative financial plan. However, it is essential to understand the terms, weigh your alternatives, and carefully assess your financial objectives and liquidity requirements to optimize your financial well-being.
Start a Certificate of Deposit today by clicking the link below to get started.
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