For those of you who are not familiar with certificate of deposits – what they are, how they work, what you should look for – this helpful guide to CDs will help get you going:
CD Basics & Features
A certificate of deposit is a type of interest-bearing account. It is similar to a savings account, but is time-based, has generally higher interest and after the CD reaches maturity, the depositor receives the interest. The amount of the interest is known as the certificate of deposit yield. Before depositing your money into a certificate of deposit account, you will need to choose CD term (or length of time that the money will be deposited) that works for you. Just like other types of investment accounts, you will also need to choose a beneficiary. For a more in-depth definition of certificate of deposits, read What Is a Certificate of Deposit. Once you understand the basics of CDs, you’re ready to choose the type of CD that’s best for your needs.
Types of CD Accounts
- Traditional CDs
- Variable Rate CDs
- Fixed Rate CDs
- Jumbo CDs
- Brokerage CDs
- Zero-Coupon CDs
- Bump-Up CDs
- Callable CDs
- Liquid CDs
- Thrift CDs
- Uninsured CDs
- No-Penalty CDs
CD Frequently Asked Questions (FAQs)
- What is a CD Passbook?
- Does my principal affect CD rates? If you invest more, will you get a better rate?
- How do yield curves affect CD rates?
- What are the advantages and disadvantages of jumbo CDs?
- Should CD beneficiaries renew?
Advanced CD Investing Tactics
- CD Laddering Strategies
- Negotiating a Better CD Rate – Is it possible to get a higher CD rate than what’s advertised?
