Certificate of Deposit (CD)
A Certificate of Deposit (CD) is an investment vehicle offered by banks which guarantees a certain set amount of interest for a specified amount of time. Depositors are restricted from withdrawing money from the account, although they may still remove the money it is most often penalized a set amount of interest.
CD’s are offered in anywhere from 3 month to 5 year earning periods. Typically the longer you agree to let the bank hold your money the higher the interest rate is you are going to receive. A common way of maximizing your interest iearnings with a CD is by creating a CD Ladder.
Article by Kyle
Kyle is the owner and operator of SuburbanDollar.com. He has no formal background in finance or economics which allows him to bring a lay persons view not clouded by formal teachings. You can read more about him or hit him up on twitter to learn more.
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