Personal Finance

High CD Rates:The Key Reason for Putting Your Money in Certificate of Deposits

A Certificate of Deposit is offered by credit unions, banks, savings and loan institutions. Just like other customer deposit accounts would do, the FDIC will insure the certificate of deposits which they have with their members up to the highest amount that is allowed by law. Certificate of deposit rates are normally higher than what is usually offered by a savings account. When you have a comfortable amount of money which you cannot use for a while, it is better that you consider putting it in a Certificate of Deposit account offered by a reputable financial institution. Here are some reasons why you should put your money in a CD.

Putting Your Money in Certificate of Deposits

· Making Money Is Guarenteed

The bank that offers a Certificate of Deposit promises to pay a fixed rate of interest, therefore guaranteeing that you will make good returns on your money. The bank will use your money to help others or invest in other ventures that earns them a higher rate of interest than what you are offered. Certificate of Deposit rates are considerably higher than what is offered by checking and savings accounts. But there are applicable penalties when you withdraw your deposits prematurely, so its better when you leave the amount to maturity.

· You Will Never Lose A Single Penny

Unlike when you invest your money in the stock market, CD investments offer a safe haven where you can put your money. The level of stability which is offered by the market is exceptional, and there really is no volatility. From the start, you can know how much you will expect to earn from your investment. Putting your hard earned cash in stocks cannot guarantee you the peace of mind that is provided by CD’s.  No matter what happens, your investment is well secured.

· Government Protection

The FDIC, a government agency, makes sure that anyone who deposits money in US bank accounts won’t lose the money. In the event of failure by the bank, it will still be possible for the depositor to withdraw money up to the limits set by the FDIC.

· Rollover Safety

When your certificate of deposit matures and you don’t withdraw the money, it automatically rolls over to another CD without money lost. This means that you will be earning interest in the initial principal,  plus the interest that had accrued in the first round. This is not comparable to 401(k) and IRA which loses value when they are rolled over.

Finding the Best Certificate of Deposit Rates

If you are wondering about the best options within the current CD rates, it’s imperative to know that there are several choices available to you. To start with, you can go online and check with many websites that are available. You will discover that there are many informative companies that show which bank offers the best interest rate. Compare the different Certificate of Deposit rates among banks and find which option is best for your personal investment needs.

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