There are lots of different types of Certificate of Deposits (CDs). One in particular is called a jumbo CD that which involves a minimum of $100,000 to purchase.
All CDs are considered "timed deposits" regardless of the amount of the original investment. That is because a rate of return is guaranteed for investing the money for a specific period of time. That time frame can range anywhere from 3 months to 6 years. At the conclusion of the time period, the CD has matured and the investor will get back not only the original amount invested by the additional interest earned. In the case of a jumbo CD, that can mean the original $100,000 can earn a hefty profit.
If you are investing a sizable amount of money into a jumbo CD, you will typically earn a higher rate of return by investing for a longer period of time. Normally, it is the length of time that determines what the financial institution will pay you to invest your money with them. In exchange for getting a higher rate of return, investors need to be aware that they will be unable to touch their jumbo CD until the maturity date. If you try to access the money before hand, you will have to pay penalties. Sometimes the early withdrawal fees come in the guise of forfeiting several months' interest.
Many conservative or elderly investors choose jumbo CDs as a place to invest their money. Because of the low risk nature of the types of investments, they are typically a safe place to let large amounts of money maintain their principal value as well as grow at a steady pace. It is advised not to invest more than $250,000 into a jumbo CD as that is the cap of FDIC insurance protection (until January 2010) for any one CD.
