Always Get the Insured Certificate of Deposit Rates (CD)

If you are planning to invest your money in a way which is short term and involves minimal risk then you can consider a Certificate of Deposit or a CD. A CD is quite similar to a normal savings account. It allows you to save money while you earn interest on it. However, in case of a CD one cannot withdraw money according to his wish and that is why it is considered to be a much better alternative. If you successfully get the best CD rates then you will also get the highest return on the amount that you have invested. In short, if the interest rate is high it will gather higher income.

Sometimes you may also find a broker who is offering you the highest CD rates. But we would recommend you to stay away from them, because:

Firstly, they often ask you to invest huge amount of money. But a credit union or bank will never ask you to do so. There are some cases where they have asked for a minimum investment of $10,000 or more.

Secondly, if you are purchasing them from a broker, make sure that it is insured by the Federal Insurance Deposit Corporation (FIDC), otherwise the chances of risk are very high. While purchasing, do mention an insured certificate of deposit. If you feel that the risk is much higher for you then you can always go to a bank or a credit union.

Thirdly, brokerage charges can be outrageously high. Always do a market research regarding the fees before you get into the deal. But, it is always advisable to go to a financial institution because the brokerage charge may go beyond the sum that you would receive from the high rates of interest.

You must be aware of the maturity date of your CD. Some financial institutions and brokers routinely renew the CD when it expires. They will not renew it if you specify them. Therefore, rather than telling them to renew the CD, it is always a better option to collect the amount and reinvest it in different rate, which is higher.

If you are not bothered about keeping the best interest rate, you can always go for the long term CD. If you invest your money for a longer period, the broker or the financial institution will be required to make revenue from it. This is why, they will keep offering high rate of interests. It is always preferable to follow this route as you get high returns on your invested amount.

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