Advantages of a Certificate of Deposit
For many people, putting money into a bank account is the easiest way to begin saving. It gets the money out of your hands directly and makes it harder to access, leaving it untouched.
If you’re one of the minorities who has trouble saving money in a traditional bank account, you may want to consider speak with CD brokers specializing in gaining you higher interest. These professionals can let you know the advantages of a certificate of deposit, or a time deposit where you are required to keep a specific amount of money in a financial institution for a certain amount of time.
- Fixed or variable rates. When you leave your money in one place, you want to know how much interest it is going to gain. Many times, a certificate of deposit will have a fixed or variable rate, so you’ll know how much your balance is growing.
- Safe and secure. Certificate of deposits are very safe to keep, because they are covered under the Federal Deposit Insurance Corporation, who will pay you the principal and interest accrued on the account if your bank fails. If it’s within a credit union, you will be paid by the National Credit Union Administration.
- Required time limit. Knowing you can’t access your money may seem hard at first, but if you are saving for something important, you can set the time frame so that you only touch it when necessary. Some financial institutions offer no-penalty accounts, which allow you to access money in the case of an emergency.
Saving money doesn’t have to be as hard as it sounds. Speak with your bank or credit union about certificate of deposit options.