Have you ever wondered which is the safest form of investment? It is a Certificate deposit known popularly as CD. It offers higher interest rate than your normal bank savings. It can be fixed for a period of time say, about a year, six months or more. You must remember one thing that if you withdraw the amount before the maturity dates you will have to pay a penalty for early withdrawal. If you want to reap profits from your investment, plan it wisely. Invest only if you think you can have them in your account for long. If not, opt for a shorter Certificate Deposit term.
Other than bank, thrift institutions also offer you these certificate deposit schemes. This definitely fetches you higher returns than having it in your savings account. Do you still think that you should have them in your savings account? Think twice, why not invest them in the right type of deposit than get 3.5% interest rate on your savings account annually. You will get better interest rates for a shorter period, roughly around six months.
Do not invest in hurry, you must make sure you have mentioned the term before you sign up for the form. If you have unknowingly committed yourself for a period of 5 years then your money will be stuck there for a longer period. Remember that you will lose out your principal amount in case you were to encash your CD much before its term. Find out what would the penalty be?
That doesn't mean you should just accept any CD rate that comes your way. You should still try to find a high interest CD rate. Your first step should be to compare what rates the online banks are offering. This can easily be done online at a rate comparison site. Try now!
Kirthy Shetty:
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