A certificate of deposit or CD is a low risk savings tool that could boost the amount earned in interest while keeping money invested safely. CDs generally help savings grow at a faster rate than traditional savings accounts.
But why get one?
Get a CD if you are setting money aside for a large purchase like a car or down payments. CDs are also great if you want to avoid the stock market and earn a return better than typical savings accounts.
To get a CD apply online or in person at your preferred bank or financial institution. The key difference in this savings tool is that you will deposit money into it once, unlike traditional accounts where you can add contributions over time.
Interest earned in a CD is credited daily or monthly and you receive the money earned when the CD term ends or you can get regular interest payments through your bank. Once a term ends, it can be renewed at a new rate. The longer you commit money to a CD, the higher the interest rate.
CDs are a great way for us to effectively save with high interest returns. They can make a world of difference when we’re making large purchases, so don’t forget them when you’re making your plans.