The interest rate offered at the time of purchase is in effect the whole time you hold that CD.
Even if anything happens to the bank, your money is safe.
Ready to learn more about CDs?
Read on for our guide to investing in these financial products.
How Does a CD Work?
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Do you avoid people too?
Enough small talk.Here are some waysto earn extra cash, without all of the social stuff.
What Should You Look For When Choosing a CD?
That really depends on your long-term financial goals, says Calonia, echoing advice offered by theU.S.
Securities and Exchange Commission.
Did you know?
If youre planning to use your CD as an emergency fund, be wary.
Instead, consider using ahigh-yield savings account, a truly liquid option, for your emergency savings.
Heres howThe WSJ breaks it down:
Whats compounding?
Put simply, its how your investment grows over time.
Lets say you invest $10,000 in a three-year CD earning 5% annually.
In the first year, your $10,000 investment will earn $500.
In the second year, 5% of the new total ($10,500) will be $525.
In the third year, 5% of $11,025 will be about $551.
More than half of respondents said theyd want 3.01% or better.
Want to see whats available?
not variable, dont have call option [not callable or bump-up]).
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What If You Need the Money Before the Maturity Date?
Calonia warns against withdrawing any money from your CD before the maturity date.
(Can you sense my millennial sarcasm there?)
You know which ones were talking about: rent, utilities, cell phone bill, insurance, groceries…
