Reasons to Get a Certificate of Deposit

In an uncertain economy fraught with shaky market conditions, there's never been a better time for some people to get a certificate of deposit. A certificate of deposit, also known as a CD, is an investment vehicle offered by banks and credit unions. It is very easy to get a certificate of deposit and they are virtually risk-free investments because most are FDIC insured. CD rates at banks are higher than savings accounts because you agree to keep the money in the CD for a fixed amount of time as opposed to being able to withdraw it any time you want. CDs have a fixed interest rate so you know how much money you're going to receive once the term is over. This is a much lower risk investment and a good place for people to put their money rather than mutual funds, especially if they are close to retirement.

CD rates at banks and credit unions vary on the amount you invest. The more you invest, the higher your rate. If you get a certificate of deposit at a bank that does not insure the CD, you'll likely get a higher rate as well. If you want a safe place to park your money and get a higher yield than you would from a savings account, then a CD is a great option. Many people have lost money from poor performing mutual funds, stocks, and bonds, but the CD is a tried and true investment vehicle that won't keep you up at night.

The information supplied in this article is not to be considered as medical advice and is for educational purposes only.