Everyone wants to make as much money as they can, and they’re always looking for ways to capitalize on their earnings so as to make even more. The bottom line is, the more money we have the more things we can do, and do securely.
When it comes to investing money, one way to do it is by buying a certificate of deposit, more commonly known as a “CD.” CD’s are basically promissory notes, issued by banks, that earn interest. They have maturity dates attached to them too, from one month to several years. A CD’s maturity date is the date when you, the owner, can claim it without being penalized for an early withdrawal. Smaller CD’s are, not surprisingly, called small CD’s; while the big boys – those over $100,000 – are known as jumbo CD’s. Most people will be purchasing the smaller ones, of course.
As an example, let’s say you purchase a CD for $10,000. It has a maturity date of one year, and has a fixed interest rate of five percent. So, when you go to collect it at the end of your year, your CD will now be worth $10,500. Clearly, CD’s are on the safer, surer, and slower end of the investing spectrum. While other investment strategies may offer bigger and flashier returns, they also offer more risk of losing your hard-earned money. CD’s are truly a safe bet for making money at a decent pace – and what’s more, they are insured by the Federal Deposit Insurance Corporation (FDIC). In today’s uncertain economic times, that’s a pretty big deal.
Before you buy a CD or make any other important financial decision, be sure to sit down with a qualified financial services expert and ask as many questions as you need in order to feel comfortable. After all, when it comes to your money, you need to know what’s going on.
