Certificates of Deposit, What are Certificates of Deposit or CD's?

Much has been written lately about the subject of Certificates of Deposit. A certificate of deposit is a very powerful investment tool but, some are kept away because it all seems a bit to good to be true.

What are Certificates of Deposit? In simplified terms a CD is a savings certificate entitling the bearer to receive interest.

Let's start with the certificate of deposit definition from the growing resource Wikipedia: What is a certificate of deposit? - http://en.wikipedia.org/wiki/Certificate_of_deposit

The definition provided by Wikipedia is a good place for you to start, but let me just add to the information a little. If you have a large sum of money you have been hanging on to, perhaps waiting for the economy to improve or the stock market to settle down then CD's may be a good option for you.

Whatever you do don't limit yourself to your local bank. Explore the rates offered offshore and you may find the CD interest rates considerably higher than in your state or country, the Swiss Trust Bank http://www.swisstrustbank.com/CD_rates.html in St. Vincent and the Grenadines would be a good place to start as they offer some of the most generous rates available, with some off their CD's offered at an amazing interest rate of 8.5% per annum. Investors searching for relatively low-risk investments that can easily be converted into cash often turn to certificates of deposit (CDs). A CD is a special type of deposit account with a bank or thrift institution that typically offers a higher rate of interest than a regular savings account.

CD Basics

Here's how CDs work: When you purchase a CD, you invest a fixed sum of money for fixed period of time - six months, one year, five years, or more - and, in exchange, the issuing bank pays you interest, typically at regular intervals. When you cash in or redeem your CD, you receive the money you originally invested plus any accrued interest. But if you redeem your CD before it matures, you may have to pay an "early withdrawal" penalty or forfeit a portion of the interest you earned.

CD's are the simplest form of financial instruments in which to invest. With certificates of deposit you get a guaranteed rate for a fixed term, for the minimum amount of form filling. Normally a bank would require an application form, copy of passport, bank reference, and source of funds documentation. A CD is issued to the client giving the amount, the interest rate and the term.

As soon as the funds are sent to the offshore bank, they are immediately put into an investment programme, for the term of the deposit. Hence funds paid into a CD are irredeemable until due for payment, at these higher interest rates.

It is important to choose an offshore bank of some quality, such as Swiss Trust Bank in the Caribbean. As part of the Swiss Trust Group which has an excellent investment record since 1960, Swiss Trust Bank has been able to benefit from being part of this group.

This article is not meant to explain CD's in great detail, there are many ways to accomplish this step when you determine what your savings needs are. However if you wish to make it really easy for yourself you can download the forms you need here http://www.swisstrustbank.com/forms.html and call on (1) 784 458 2400 (EST) ask for David Morgan and I will guide you through the process so its really easy for you.

The Author of this article David Morgan is the General Manager of Swiss Trust Bank and has over 20 yrs experience in the banking and financial world. You have permission to syndicate this article providing you the link it to http://www.swisstrustbank.com.

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