Fortunately, there are CDs which keep your money locked for as little as six months, so you can choose a term that works for you. It is best to use CDs when you know you can keep your investment in the account for a longer period of time. You can take out the money in a CD early, before you agreed to, but there is a penalty involved. In exchange for the reduced liquidity, you get paid a higher interest rate. A CD works in the same way, but because you agree to keep your money in the investment longer, the bank has the freedom to make long-term investments.
When you place your money in a savings account, you are paid an interest rate in exchange for the bank being allowed to use and invest your money to make more. CDs do require you to agree to keep your money in the CD for a specific period of time. They also have less risk than stocks and many other types of investments. What Are Certificates of Deposit?Ĭertificates of Deposit, also known as CDs, are a type of investment which pays higher interest than savings accounts.
Let us help you choose the right term for you. We offer a wide range of competitively priced Certificates of Deposit from 1-120 month terms.
