2012年8月31日 星期五

How a Certificate of Deposit Works


Business individuals who seek to diversify their commercial ventures have considered investing in stock market, real estate and certificate of deposits. The latter is creating a strong influence among big-time and medium investors. How a Certificate of Deposit (CD) works is easily understood and agreed upon between the investor and CD-selling party.

How a certificate of deposit works starts with a bank institution or credit union giving you CD quotations that present how much percentage yield is expected annually. If you deposit your money for a certain period of time, there is an expected fixed rate to get. You must understand that a CD is a time deposit that is somehow comparable to savings account except that you are covered by the Federal Deposit Insurance Corporation (FDAC) or National Credit Union Administration (NCUA) if you are dealing with bank institution and credit union, respectively.

Simplify your scope of understanding on how a certificate of deposit works by thinking that your CD investment is money in the bank that gives you a fixed amount of profit in a certain period of time that ranges from six months to 5 years or even more. It is comparable to a savings account except that it gives you higher returns in a matter of time. The interest rate is set prior to the time you actually sign up for an investment. It is predestined and pre-calculated in other words.

In learning how a certificate of deposit works, you won't end up withdrawing your CD of investment before its time-bounded maturity. In case you do this, accrued interested is incurred.

As you open a CD investment, you are given either a paper certificate or CD passbook. But at present, integrating a book entry and denotations of periodic statements is commonly practiced.

Your CD investment gives you a fixed interest rate and you are usually given an option to reinvest or spend the amount earned once it reaches its maturity period. Reinvesting has been suggested by most banks and credit unions for it gives you more chances of earning more. A compounding interest will allow your CD investment account to increase quicker. How a Certificate of Deposit works will give you a privilege to earn.

When a bank or credit union is quoting you choices of CD investments, make sure to know the annual percentage yield it offers. It determines the amount of money you will earn in a certain period of time until expiry date. Say, if you are investing $2,000 and your annual percentage yield is 5% and the rate is 4.89%. If you allow your money to stay in the bank for one year and let the interest grow, you will end up profiting around $100. Calculate these same figures if you desire to invest $5,000 or $10,000. Doesn't it entice you to get into CD investment? But then again, know how a Certificate of Deposit works before getting a deal.




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Certificate of Deposit - Know the Facts About Making Money


A certificate of deposit better known as a CD is a deposit made based on time. It is a very common product that is offered to customers of credit unions and banks.

CD'S are act similar to a savings account because you are considered to be risk free because a CD is insured by the FDIC. There are some differences in savings accounts and CD'S such as a set term for maturity. The CD will have a fixed term such as 3-12 months and also will have a fixed interest rate. The reason is that for you to get the full maturity you must hold it the allotted time. At the time of maturity you will be able to withdrawal the principle amount plus the interest that has accrued.

What a financial institution does is it will give you a higher rate for agreeing for a longer term. This differs from a savings account which generally gives you a lower rate because you have instant access to that money.

Most CD'S have only fixed rates but in some cases you will see banks offering a bump up rate which will be adjustable. If you get into a situation were the interest rate is on the rise then you get into a CD that will allow you a one time adjustment.

It is good to know that there are some things you must know about interest rates. In general if you have a larger amount to deposit then you will get a higher interest rate. If you have a longer term then you can also get a higher rate over the length of the CD. If you find a smaller bank a lot of times they will offer a higher rate to attract new customers.

Basically how a CD works is you need to decide on how much you are going to deposit then when you go to the bank you make your deposit. You will then receive a book that will have the deposit amount and rate on it. You will receive periodic statements so that you know how much interest you have earned.

You can also have the interest made on the CD paid to you on a monthly basis but be aware that you will not benefit form compounding interest. Also CD'S usually have a minimum amount that they require to deposit.

If you do not cash out your CD at the end of the term then usually the bank will roll it over for another term that was the same as before




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What is a Certificate of Deposit?


A certificate of deposit is a savings instrument similar to savings accounts, stocks and bonds and is usually available from any bank or credit union. They differ from savings accounts in that a lump sum of money is deposited into the certificate, also called a CD, and the money is held in the account collecting interest. CDs have different interest rates and terms, or length of time the money must stay in the CD to collect interest. Deposit and withdrawals are usually locked for the entire life of the CD, with the owner of the CD barred from adding or removing funds from the CD for the term of the instrument.

CDs are generally offered in several different terms and interest rates. Most are available in terms ranging from a few months to several years. Normally the higher the interest rate available, the longer the money must stay in the CD. One of the main differences between CDs and other money investing techniques is all the money in the CD is returned to the depositor when the term of the CD is completed. Unlike stocks or bonds, which can gain or lose money, CDs collect interest and are not invested in any other instruments.

Certificates of deposit are available from any bank or credit union and different institutions will have different options to choose from. A smart CD shopper should always shop for the best rate and a term that agrees with their investment style. Those looking to invest in CDs should always be aware of any penalties for early withdrawal of funds and have a plan on what to do with the money when the term of the CD is over. Most investors role over the money in a CD, once the term is met, into another CD with a higher rate. The interest earned on a CD can be paid to the depositor as soon as it is earned on the money deposited, or it can be rolled into the principle of the CD. All the funds, including interest, can be rolled into a new CD once the investment term is completed.




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How Do I Calculate Certificate of Deposit Interest Rates?


Certificate of deposit interest rates are a source of great confusion for many people. Acronyms like APR and APY confuse people greatly. Luckily, there are many resources available to you online. It is also very easy to calculate on your own.

First, let's look at what a certificate of deposit is: One of the ways that a bank makes money is to invest. They can invest in a variety of financial instruments but regardless of what instrument they use, they all need one thing: money. Banks are required to keep a certain amount of uninvested money on hand at all times so they often go to other sources for money to invest.

One of those places is you and I. They use our money to make money for themselves but if they rely on the money we deposit in to our checking and savings accounts, there is no guarantee that we won't take it out tomorrow.

This is where a certificate of deposit enters in to the picture. When you agree to let the bank have your money for a predetermined amount of time, they can invest that money and make a profit. In exchange for the use of your money, they pay you interest. The interest rate is higher than a savings account. Certificate of deposit interest rates are almost always at least one point higher than a savings account.

The best way to think of these interest rates is in terms of one year. If the APR or Annual Percentage Rate is 2%, you are earning 2% on the money that you have in that CD. If you have a $10,000, 1 year Certificate of deposit with a 2% APR, you are making $200 for the year.

The best way to figure this out is to simply Google "CD APR Calculator." This will bring up entries for online calculators where you can enter the figures in to it and it will tell you how much money you will make.

Don't forget that your bank or credit union will also be happy to calculate this for you.




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2012年8月30日 星期四

Certificate of Deposit - An Old Favorite


Certificates of Deposit might be the safest investment vehicles out there and in the volatile market of early 2009, this old favorite might be the best investment for today. What is it? A CD is basically your assurance that a bank will be able to use your money for a specified period of time. Just as you pay the bank back on their money with interest (a mortgage or car loan for example) they do the same for you with a CD.

What are the advantages of a CD? First, they are safe. If you have money and you know you are going to need it and can't afford to have any risk attached to it, get a CD. Next, they are easy to set up. It's as easy as shopping around for the best deal at an institution you trust and signing up. If you can open a savings account, you can open a CD. You also don't have to be a financial genius to make money on a CD. There aren't many different types (other than the length and amount of money invested.)

What are the disadvantages of a Certificate of Deposit? Remember that the safer the investment, the less money it will pay you. You don't get a lot safer than a CD so don't look to get rich unless you are rich already. At the time of this article, CDs are paying between 2% and 4% on average. Contrast that with a savings account and you will earn an average of 1.98% as of today. In order to get value from a CD, you need a fair amount of money and more importantly, you have to put it in to a long range CD. 5 year CDs can earn you close to 4% but that's a long time for the average person to have money tied up. On a related topic, I've answered this question a couple of times lately and then heard it on a radio talk show just the other day:

"I just received a large sum of money from an inheritance. I don't know anything about investing so I want something safe where I can leave it alone."

My answer to that: I call it stacked CDs.

Take the entire amount and divide it up. Let's so you have $50,000. Divide it in groups of $10,000 and put it in to a 1yr, 2yr, 3yr, 4yr and 5yr CD. This way you have 10K available to you in one year. If you don't need it, buy another 5yr CD with it and keep turning it over like that. As markets improve, you may want to talk to a financial advisor about slightly more aggressive ways to invest your money but don't forget about the Certificate of Deposit as a safe way to make a little bit of money during a less than positive economy.

In today's economy, don't forget about the CD. It isn't the most exciting investment vehicles out there but exciting almost always means volatile. Make sure to balance risk versus reward.




Tim is the author of http://www.elementary-finance.com, a financial blog providing beginning investment and finance advice to those who have a desire to learn the basics of investing and finance.





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Bank of America Certificate of Deposit Rates - Tips to Find


Are you planning to get better CD rates in bank of America? Or are you looking for another institution which can offer you a revised and lucrative rate of interest than bank of America. In both cases you have to conduct a wide survey to get the details of the better rates being offered and how to shop for them. Bank of America is the second largest and the most popular bank in the United States of America. The bank operates strongly and has millions of customers being benefited in the process. The bank of America has its headquarters in the Charlotte city of America which is situated in the state of North Carolina. The bank boasts of having a total of 6427 branches. All of them work with efficiency to offer you the best interest rate ever.

If you are in search of better CD rates from any other FDIC-insured institution then you must go through a comparison chart to have a better idea that who is offering you a more lucrative deal and in which case you are going to be the better gainer. There are other organizations offering several CD rates. However, a high rate is not enough. You have to make sure about the reputation of the institution involved in the process along with the security of the cash amount you are investing. With Bank of America your money is absolutely safe. You only need to judge the final CD rates before taking a final decision.

Now to find the best certificate of deposit rates in case of Bank of America you need to visit online and go through several company rate of interest offering information. Here you will first come to know which are the organizations who offer certificate of deposit rate other than Bank of America. There are hundreds of such fiscal institutions and banks. Thus, it is best if you keep a track of those in your own town. After doing a good comparison you can then come to a decision that whether it is Bank of America or some other bank you would approach for certificate of deposit. Think, judge and then plan the best with your money.




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The Advantages of a Certificate Of Deposit Ladder


If investors are concerned about locking in low interest rates for a long period of time, then they should consider building a certificate of deposit ladder. A CD ladder as it is often called is an excellent investment tool to spread the risk of rising interest rates over several different certificate of deposit maturity dates in order to maximize the interest earned while keeping options open to the investor.

What Is A Certificate Of Deposit Ladder?

Certificate of deposit ladders stagger the maturity dates of CDs in a dollar cost average type of investment. To establish a CD ladder, an investor can open certificates of deposit at varying maturity dates such as six months, one year, two years, three years and five years. As each certificate of deposit matures, the investor will then reinvest the proceeds into a longer maturity. So, for example, as the one year certificate of deposit matures, the investor would purchase a brand new five year CD as all of the other certificates of deposit inch one more year closer to maturity. The investor would then have CDs over each year with one maturing every year resembling the rungs of a ladder, hence the name, CD ladder. Investors can also purchase multiple certificates of deposit in order to have a new CD maturing every month.

Advantages of a CD Ladder

The main advantage of a certificate of deposit ladder is that this type of investment leaves an investor flexible to take advantage of increasing interest rates. With a new CD maturing each year, the investor has new money to continually invest at what should be a higher interest rate in an economy where rates are increasing. This also protects the investor from needlessly locking in too much of his or her investment in long term CDs at low interest rates.

Certificates Of Deposit Are FDIC Insured

Certificates of deposit are insured by the Federal Deposit Insurance Corporation (FDIC). They are insured up to $250,000 per account at each financial institution that you bank with. This is a great benefit to investors. They can invest their money in certificates of deposit and CD ladders without the fear of losing their money because of a bank failure.

Certificates of deposit offer investors an excellent alternative to high yield savings accounts. CDs can provide investors with competitive interest rates over multiple maturity dates. And, building a CD ladder offers investors a great option to continue investing while waiting for higher interest rates in the future. CD ladders give an investor the flexibility to take advantage of increasing interest rates over the long term.




Hank Coleman is the founder of several financial blogs, focusing on topics such as how to find the most competitive certificate of deposit rates. He is an entrepreneur and professional in the government sector. Hank holds a Bachelor's degree in Business Administration, a Master's in Finance, and is currently studying for his Certified Financial Planning (CFP) credentials. Always looking for a trusted financial institution for advice and tips he tends to look up information at http://www.discoverbank.com more often than not.





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2012年8月29日 星期三

Money Markets Vs Certificates of Deposit - Which to Choose?


Deciding between money market accounts and certificates of deposit is a matter of determining the length of time and level of security you desire when investing. Both forms of investing can be very beneficial to your assets, but they satisfy different goals. Therefore, to decide between them, it is important to determine your goals.

Let's look briefly at some goals you may have in mind:

Long-Term Savings - If you're looking for a way to invest that can guarantee the amount of funds at maturity then certificates of deposit are probably the best way to go. They are debt instruments that are issued by banks or other financial institutions in exchange for money paid by an investor. The CD is given for a predetermined amount of time with a fixed interest rate until maturity. The trade-off in this is that you may not have access to your money for a while, anywhere from weeks to years. However, if you're not interested in having access to your money (and like investment growth) the CD is a good option.

Easy Access to Funds - If you are looking for an investment tool that allows you access to your funds whenever you want them then money markets would be a better choice. You can open your account at most any financial institution, from which you should receive a checkbook that will give you the ability to regularly invest in the form of purchasing stocks, bonds or mutual funds. Also, you can deposit cash easily in these accounts.

If you're still not sure of which route to take, here are some other ideas to keep in mind:

Certificates of deposit are FDIC insured up to $100,000, much like money in a savings account; however, if you decide to opt for a longer maturity period (and higher interest rate), you may have to wait a very long time to access your funds.

• Money markets tend to keep their share price right at $1 per share, which works out nicely for some; however, if you want to take advantage of interest rate maturation you will have to deposit more money instead of waiting over a period of time like with CDs.

Making the decision of what you should do with your cash can be a tough one. But with certificates of deposit and money markets both clearly offering unique perks, your biggest job will be to decide which goals are most important to your investment future.




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CD Laddering - Make Your Certificate of Deposit Work For You


If you are looking for a safe, lucrative way to invest a large amount of money for an extended period of time, Certificate of Deposit (CD) laddering may be just the thing you are looking for. It is impossible to maintain great interest rates on single, long-term investments because they are constantly fluctuating. CD laddering allows the investor to continue earning the best interest rates available for as long as they keep their money invested.

CD laddering involves purchasing multiple certificates of deposit, each with a different maturity date. It usually requires a substantial amount of money so it is important to make sure that you can afford to go without that money for an extended period of time. Here is an example of how it works. The investor has $10,000 that he/she wants to invest so they purchase a one year, a two year, a three year, and a four year CD, each worth $2,000. This way one will expire each year for four years. When the first one matures, the investor withdraws the money and any interest earned from it and re-invests it into a new four-year CD. The second year, they will do the same thing with second one. Likewise for the third and fourth year. They will continue to do this every year until they no longer wish to invest their money.

The key to laddering is to get the best interest rates possible when you re-invest the proceeds from one CD into another. This will maximize your rate of return. So, if you choose to use this investment strategy, it would be wise to compare the rates and requirements of several different financial institutions before jumping in feet first.

Besides getting a great return on your investment, there are other added benefits. If by chance you do end up needing some of your money, you will at least have access to it once a year. If you were to put all of your money into a single, long-term investment you would not have that option without taking an early withdrawal and paying a penalty for doing so. An early withdrawal is still an option with CD laddering although it is not recommended. On the flip side of that, you also do not have immediate access to your money. This is ideal because you can not go to the bank and withdraw the money on a whim and end up regretting it later. You are pretty much forced to wait which allows you to thoroughly consider other options before you withdraw your money.

A single certificate of deposit is fine if the investment amount is small and the investment term is short. If you are looking to make a large, long-term investment, CD laddering is the best option. You still have the freedom to determine how your money is invested while getting the highest possible return on that investment.




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Certificate of Deposit - The Financial Safe Haven


A certificate of deposit is an extremely safe financial instrument designed to provide a higher yield than traditional savings accounts. CD's can be an attractive savings alternative if the account holder does not need immediate access to the funds.

Understanding CD's

Unlike stocks, bonds, and mutual funds, CD's are not subject to daily market fluctuations. They provide a reliable and predictable flow of interest income over the life of the CD. Credit Union members can purchase CD's in nearly any denomination over a variety of time periods. The interest rates that are offered on CD's are determined by a number of factors, including the prevailing federal funds rate, the amount of the deposit, and the term of the deposit.

Since higher rates of interest are paid on CD's, account holders should understand that their money will be unavailable for withdrawal without penalty throughout the entire investment period. CD terms can vary from 3 months to 5 years or more, and early withdrawal can result in substantial penalties. Upon completion of the term, the depositor will see their entire principal returned in full.

CD Strategies

Since CD's usually pay interest on a monthly basis, they remain a preferred investment tool for retirees looking to receive a predictable income. To address the potential for inflation, which can rob a CD of earnings value, many depositors choose a "laddering" strategy, where they purchase a variety of CD's with different maturity dates. This helps smooth out the variations in interest rates since expiring CD's are continually reinvested.

Safety

In addition to paying higher interest rates than savings or money market accounts, deposit certificates do not have the volatility of stocks, bonds, or mutual funds. For every deposit certificate, the National Credit Union Administration (NCUA) insures Credit Union members up to $250,000 per account holder.

Other Considerations

It is important to understand the rules and restrictions prior to investing in a certificate of deposit. Particularly with issues relating to maturities and tax consequences, investors are encouraged to seek further information from a member service representative at the Credit Union.

A certificate of deposit is a stress-free investment vehicle that will provide a superior rate of return.




Certificate of Deposits are an investment choice for individuals who want to avoid the roller coaster ride of the stock market. To gain more knowledge and understand CD's better, pay Wayne Westland Federal Credit Union a visit not tomorrow but today!





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2012年8月28日 星期二

What is a Certificate of Deposit?


A certificate of deposit is a savings instrument similar to savings accounts, stocks and bonds and is usually available from any bank or credit union. They differ from savings accounts in that a lump sum of money is deposited into the certificate, also called a CD, and the money is held in the account collecting interest. CDs have different interest rates and terms, or length of time the money must stay in the CD to collect interest. Deposit and withdrawals are usually locked for the entire life of the CD, with the owner of the CD barred from adding or removing funds from the CD for the term of the instrument.

CDs are generally offered in several different terms and interest rates. Most are available in terms ranging from a few months to several years. Normally the higher the interest rate available, the longer the money must stay in the CD. One of the main differences between CDs and other money investing techniques is all the money in the CD is returned to the depositor when the term of the CD is completed. Unlike stocks or bonds, which can gain or lose money, CDs collect interest and are not invested in any other instruments.

Certificates of deposit are available from any bank or credit union and different institutions will have different options to choose from. A smart CD shopper should always shop for the best rate and a term that agrees with their investment style. Those looking to invest in CDs should always be aware of any penalties for early withdrawal of funds and have a plan on what to do with the money when the term of the CD is over. Most investors role over the money in a CD, once the term is met, into another CD with a higher rate. The interest earned on a CD can be paid to the depositor as soon as it is earned on the money deposited, or it can be rolled into the principle of the CD. All the funds, including interest, can be rolled into a new CD once the investment term is completed.




For more information on CD Rates [http://Rates.cd] visit [http://www.rates.cd].





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Investing in Certificates of Deposits


When most people think of saving and investing, particularly the older generations, they generally think of Certificates of Deposits (CDs). A Certificate of Deposit is a time deposit commonly offered by banks, credit unions, and savings and loan institutions. Since CDs are insured by the FDIC, just like savings and checking accounts, they are considered a "cash investment," which simply means cash in a CD is like having "cash in the bank."

How CDs Work

Investing in CDs is simple: you pick a maturity, say 6 months, 3 years, or even 5- or 10- years and shop around for the highest rate. Once you've found the best deal, it is a simple application process to open a CD account at your bank of choice. Note that you can't get access to your CD before the maturity date without stiff penalties, so it's best to choose a shorter maturity if you aren't sure when exactly you will need your money.

CD Interest Rates

The range of interest rates offered by Certificates of Deposit usually range between that of savings and money market accounts and that of corporate bonds. CDs are a bit riskier than cash in a savings or checking account since you are locked in for the duration of the contract. If interest rates go up, you can't easily cash out of a CD without paying a penalty. That said, CDs are less risky than most bonds because the principal doesn't fluctuate. And since they are FDIC insured, you don't have to worry about losing money in a CD. A corporate bond, on the other hand, could potentially become worthless if the company declares bankruptcy.

In today's technology-driven world, it is possible to use the internet to find the highest-paying CDs nationwide. Since most banks allow you to do pretty much everything online, there's no reason you couldn't open a CD at a bank halfway across the country.

CD Penalties

Withdrawing funds from a Certificate of Deposit before the maturity date could result in severe penalties, often equal to as much as 10-15% of your accumulated interest to date, not to mention missing out on future interest payments.




Visit AmateurAssetAllocator.com for more on where to find a high interest CD online, Roth IRA rules, and other personal finance/investing topics.





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Buying a Bank Certificate of Deposit - The Advantages and Disadvantages of Certificate of Deposits


In the World of Finance, A CD does not mean a compact disc; it stands for a certificate of deposit. Thus, if you manage to buy a CD through savings and loans or through banks that is worth a certain amount of money, then the bank will be paying you in return a specific interest rate for a certain time. Consequently, if you buy a thirty-month CD, you may get a 3%, which is equivalent to $5000. Although a bank might not issue CDs for less than $1000, this is not the case all the time. Usually there are no requirements for issuing CDs.

You are free to choose when to get your interest, whether annually, quarterly or monthly, or even with the maturity of the CD. Just take care that whatever your interest is, it will never be added to your original amount of the CD. This stands in open contrast to a normal savings account. Nevertheless, you can choose to be paid by check or to have your earned interest deposited in a new account.

It is preferable not to redeem your CD before the maturity date agreed upon. If you cash earlier than agreed upon, you might lose 3 to 6 months of interest payments; such a penalty is known as the "penalty for early withdrawal".

One of the advantages of CDs is their being insured by the government (usually the FDIC program) and this is because they are certificates issued by banks. In other words, buying CDs is a risk-free investment.

Another advantage is the freedom to buy and sell your CDs just like any bond or stock, for example, through a brokerage house. By selling your CD this way, you will avoid the penalty payment.

You should also put into your consideration that CDs usually come with a minimum, mostly $5000 and they must have round numbers (multiples of 1000).




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Considering A Bump-Up Certificate of Deposit?


The key appeal of a certificate of deposit (CD) is that - for the most part, as compared to other forms of investments - it offers predictable and risk-free return on your money. That's because a simple formula takes the amount that you're investing, the length of time you're applying it and your interest rate and tells you the exact total you can expect at the end date of the agreement, also known as maturity. Furthermore, it's a safe choice because this type of account is insured by up to $250,000 by the FDIC.

So it may not make sense to many investors to change the security and outcome of the situation by choosing a bump-up certificate of deposit (which may also be called a variable rate certificate of deposit). What this means is that your interest rate can be adjusted during the length of the agreement, which also changes the total you can expect to make in a way that you can't necessarily guarantee at the time you sign off on the agreement. Essentially, the idea is that you'll stand the chance to make more over the same unit of time.

How it works is that whenever the bank's rates might go up during the length of your agreement, you can appeal for your interest rates to go up to meet the current offer. Sometimes you can gain only one adjustment, if not a few. When you adjust is pivotal, because an earlier bump-up can mean more accrual over time, but a later bump-up may be higher. These rates are usually adjusted according to how the market is doing as well as how well the bank itself is doing. If you think that the economy or money market is going to do well during the length of your contract, you may wish to choose this option (which is not offered by all institutions that offer a certificate of deposit).

There are also a few trade-offs involved. In some cases, the bump-up option is only available for a certificate of deposit of a certain length or amount. For example, instead of taking an agreement for a few months, you may need to sign off on investing your money for several years. The original interest rate offered may also be lower than usual to start with since you stand the chance of gaining higher interest than the average over time. Consider all of the potential pros and cons of accepting a bump-up offer before signing off on your certificate of deposit.




TM Murphy is a professional writer who lives in NYC. She currently specializes in fashion, beauty, marketing and finance articles. For easy-to-understand financial and banking advice to use on topics such as a certificate of deposit, she often turns to http://www.discoverbank.com. TM Murphy has been writing full-time since 2006, when she graduated with a B.A. in English from Northeastern University.





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2012年8月27日 星期一

Are Certificate of Deposit Interest Rates Ever Going to Be More Favorable?


Certificate of deposit interest rates are at a low. As I write this article, interest rates at my credit union, who is normally much higher than traditional banks is only 1.50%. Is a certificate of deposit or CD a good investment right now?

The financial meltdown of 2008 has left all kinds of victims behind. The stock market investor who lost sometimes all of their investment, the homeowner who saw the value of their home reduced by more than half in some cases, and the small business owner who can no longer get a loan. These are only a few.

We can't forget about the fixed income investor. There are some investors who have saved their money for many years by using vehicles such as the CD. When certificate of deposit interest rates were more than 5% for longer term CDs, an investor who didn't want to try their hand at the stock market would simply buy a series of stacked CDs (CDs with varying mature dates so money was always available) and live off of the compounding 5% return.

Have you thought about how much money can be made with an annual rate of return of 5%? A lot of stock market investors aren't making that kind of return. Mutual funds often don't make that.

But let's look at the current problem. 5% is a healthy rate of return. Put $1,000,000 in a CD for 12 months at 5% interest and you're making $50,000 each year. That's not a bad yearly income. Sure, most of us don't have that kind of money to set aside for a CD, but for those who have saved for many decades, it's easily attainable.

When we do a little more math, we find that the same $1,000,000 CD with an interest rate of 2% is now only making $20,000 each year. That's a drastic change for the person who was living on the interest and let's not forget about everybody else who saw their returns cut in half.

With certificate of deposit interest rates so low, is now a good time to purchase a CD? If a fixed income investment like this is the only kind of investment you're comfortable with, then yes. Investing is a habit and staying in the habit is important. The other option available to you is to hire a financial advisor. They can give you some options that are just as safe but need a little more management.

For example, they could tell you about the covered call option where you basically rent your stocks to other investments. With very little work, that 1 million could be $250,000 in annual income! Because you are renting your stocks, you have a limited amount of risk and virtually no risk if you purchase good stocks that you're happy to hold for a long period of time.

Certificate of deposit interest rates will go back up but not any time soon. You might consider looking at other types of investments for now. It might just force you to try something different.




You can still make money by stacking CDs. Click here to learn how.

elementary-finance.com is your source for online financial advice . Check us out today!





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Certificate of Deposit Vs Savings Account: What Fits You?


For most people, the idea of investing is basically the same as saving up money. However, there are other ways for you to invest your money without really having to undergo a lot of risk. One such way is through certificates of deposit.

First, what is a certificate of deposit? You can consider a certificate of deposit as a time deposit, basically like your usual savings account except that you cannot really withdraw it as you see fit. A certificate of deposit usually allows you to earn a higher interest on your money but at the same time, you are discouraged to alter or withdraw that money before the fixed period of time.

If you are thinking of investing your money, and don't know whether you should go and open a savings account or if it will be better to invest in a CD, then here are some of the pros and cons of the two.

Pros and Cons

Savings accounts and certificates of deposits are all relatively risk-free, meaning if the bank collapses, you don't collapse with it as well and that your money is protected up to a certain degree. These are probably the only risk-free or minimal risk investment strategies that you can find.

One of the biggest difference between a savings account and a CD however is that there is a fixed period of time, between three months to five years, before you can really access the money you invested in a CD compared to the unlimited access that you may have with your savings account. However, banks and other institutions encourage you to invest your money longer by offering higher interest rates, meaning your money will be earning more in the longer period. The same way, a savings account may give you quick access to your money but then you might not be earning as much as you would have wanted compared to in a CD.

So how do you choose?

Your choice will basically depend on two factors: whether you need quick access to your funds or whether you want your money to earn a lot. If you think that you might need the money in the near future, then it may not be a good idea for you to invest in a CD. However, if you won't be using that money and you want your money to earn more while it 'sleeps', then investing in a CD might be the best way for you to go.




Jane Sanders at Certificate of Deposit Rates about getting the best CD rates. Learn more about Certificate of Deposit here.





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Certificate of Deposit (CD) Rates: Why Are They So Low?


Certificate of deposit (CD) rates have been extremely low since the latest recession. In fact, just 3 years ago in 2008, rates were near the 5% range. Now, you are lucky to find a rate above 1.25%. So will the rates ever increase? Are we doomed to low returns on our deposit accounts?

Why CD Rates Are So Low Now

When a bank or other financial institution offers a deposit account, the rates will typically be set to reflect the current rates from the treasury. What this typically means is this: When treasury rates are low--then cd rates are going to be low. When treasury rates are high--then CD rates are typically going to be higher as well.

When the economy collapsed in the recent recession, the treasury rates also were lowered significantly. Thus, nearly all deposit accounts (savings, CDs, checking accounts, etc.), also experienced a sharp reduction in rates.

Of course, this is great news if you wanted to refinance, or if you wanted to get approved for a low-interest loan. In fact, I was able to lock in a very low rate for my first mortgage during this period. But if you were hoping to get a solid return on your deposit accounts--it just didn't happen.

When Will Certificate of Deposit Rates Go Up?

Since CD rates are tied so closely to the treasury rates, you can expect that they should increase when the economy rebounds. Unfortunately, in 2011, some fear we may hit a double recession. Should this happen, then deposit rates may indeed stay low for the next few months or even years.

If, however, the economy begins to recover, then the interest offerings should increase along with it. This would be great news for retirees and others who rely on interest income to pay their living expenses.

How to Know When Interest Rates Increase

If you are wanting to invest in a CD, then the best way to know about rates is to find a great site that monitors rates. There is always natural fluctuations in interest, but generally speaking, it is often easy to spot a trend of increasing or decreasing interest offerings. So it can pay to shop around online (literally) before investing.

Also, don't forget to check the local banks or credit unions as well. Sometimes you can nab even higher rates as compared to larger banks. So make sure to call or drop by your local financial institutions while you are shopping around.




Do you want to learn more about investing in CDs? If so, then I'd like to invite you to my website. You can sort through a collection of articles related to investing, and also learn more tips when opening certificate of deposit accounts.





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2012年8月26日 星期日

Advantages of Buying Certificates of Deposits


There are many reasons that the advantages of certificates of deposits are compelling. In today's market and economic situation, those reasons only get better. The advantages of a CD are many and long gone are the days when only farmers wanting to stash their money until they purchase their spring seeds utilized the certificate of deposit advantages.

Today's financial markets have two types of investors: the instant gratification junkies and the long term investors. The instant gratification types have little interest in anything other than very short term certificates of deposit and often use them merely as a way to store money while they wait out a maturity on something else.

For the serious, longer-term thinker, however, the advantages of a CD are immense. Since certificates offer a fixed interest rate for a set time period, they make it easy to plan ahead and give a virtual guarantee of payoff. Unless the bank fails, the money will be there (with interest). Even with bank failures, your initial deposit won't be lost thanks to FDIC insurance.

Rates on savings and other variable interest are constantly in turmoil: changing regularly, going up and down without warning. One of the biggest certificate of deposit advantages is that lack of turmoil and change. For a 5-year CD term, for instance, you are guaranteed that interest rate over that five years, no matter what the market's doing.

Currently, another of the advantages of certificates of deposits are those same interest numbers. High yield accounts such as money market savings accounts are not competing well with CDs. For the person who thinks in terms of 1, 3, and 5 years ahead, only the advantages of a CD can deliver real and stable returns.

Many IRA, mutual fund, and other investors will utilize the stability of certificate of deposit advantages as a base line for their portfolios.

So consider the advantages of certificates of deposits when you look towards your next long-term financial goal, be it 6 months or 6 years from now.




If you always want to know where to find the best CD rates, check out bank CD rates. If you are interested in other types of banking rates, check out bank rates.





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Certificates of Deposit - How They Work


When you purchase a Certificate of Deposit (CD) you are actually loaning a specific amount of money to some financial institution, whether it be a bank, a credit union, or even a broker, for a specified length of time. This allows them to use your money for such things as consumer loans or security investments. In return, they pay you interest on the amount that you loan them. It is very similar to a savings account with the exception that you can not withdraw your money any time you want. This all sounds cut and dry but there is more to Certificates of deposit than meets the eye.

When you purchase a CD you will be required to invest a minimum amount that will be determined by the issuing company. You can choose from three month, a six-month, a one-year or a five-year term. Once it matures or reaches the end of its term, you can either withdraw your money plus any interest earned, renew it, or roll your money over to a higher interest CD. The risk associated with this type of investment is fairly low because in most cases the Federal Deposit Insurance Corporation (FDIC) will insure it.

Certificates of Deposit are available with both fixed and variable interest rates although a fixed rate is more common. The actual interest rates will vary according to the type of CD, the investment amount, the chosen term, and the company that it is purchased from. If you are wise, you will go after the highest interest rate possible in order to maximize the return on your investment. In many cases, you can get a higher interest rate just for choosing a longer term CD because the issuing company is able to use your money for an extended period of time, which means they make more money.

Pay close attention to the maturity date on your certificate of deposit otherwise you could pay dearly in the end. If you can not afford to have your money tied up for the duration then you may want to rethink your options. If you withdraw your money early you will be charged a penalty. If you do not claim the funds from a matured CD within the time frame set forth by the issuing company, you could be charged a penalty for that too or even worse, it could be renewed automatically which will tie your money up even longer.

Certificates of Deposit are a great way to safely invest your money while earning a modest return on it. Sure, you can earn interest on a Savings account but it will be at much lower rate and it is too easy to withdraw money from it. As with any investment just make sure you know what you are getting yourself into. Evaluate your finances to make certain that you can afford it and read the terms and conditions carefully. It is not a wise investment if it ends up costing you more in the end.




For more information on High Interest Certificates of Deposit [http://www.cdinterestratesguide.com/high-interest-certificate-of-deposit.htm] visit www.cdinterestratesguide.com [http://www.cdinterestratesguide.com] today!





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HSBC Certificate of Deposits - Rates and Key Details


HSBC offers many schemes in savings account. They are Online account, Certificate of Deposits, Premium Money Market Plus, Premier Investor and Regular Savings. Certificate of deposits is the new trend now. It has high interest rate and commercial value. According to this scheme, the customers should invest their money for a particular time. Since the bank can invest the money during the particular time period, this scheme has high value. The bank provides high rates for long time period. The Annual Percentage Yield in HSBC certificate of deposits is high. The various annual percentage yields and the time duration are listed below here.

HSBC Certificate of Deposits Rates:


3 Months - 0.05%
4 Months - 0.05%
6 Months - 0.10%
7 Months - 0.10%
8 Months - 0.10%
9 Months - 0.10%
11 Months - 0.10%
1 Year - 0.70%
13 Months - 0.70%
15 Months - 0.70%
2 Years - 0.50%

The minimum deposit amount required to open this account is $1000. The minimum balance amount required to get APY is also $1000. The APY with interest checking plus is nil here. This bank requires the particular details to check the applicant identity. Those details are mentioned below here.

Key Details:


If you are a US citizen, then you should provide your social security number or the Tax ID number.
You should also provide Drivers license for identity proof. You can also submit any other ID cards issued by the government.
If you are non-US citizen, then you should submit your resident alien card.




Click here---> To start a HSBC Certificate Deposits. Get to know about the HSBC CD Rates

Divya Kannan





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Planning For Your Retirement With Certificate of Deposits


The importance of saving for retirement is stressed throughout our lives. Most people value employment opportunities that offer 401k retirement accounts, particularly those who are lucky enough to have their contributions matched by their employers. In addition to 401k accounts, or for individuals who don't have the option for 401k plans, the IRA is a very popular method of saving for retirement.

What many people don't consider are the benefits of using Certificate of Deposits (CDs) as a way to save for retirement. Much like traditional savings accounts or your 401k - Certificate of Deposits offer a very low risk investment for people who save over a longer period of time. You can open a CD with almost any amount of money, and the longer you keep your money in the CD, the higher your interest rate will be. You select your savings term when opening the account from the available options - typically between 3 months and 5 years, but it depends on which financial institution you use.

A Certificate of Deposit is the same as loaning the banking institution your money for the term you choose to save for. In exchange for the "loan", the bank gives CD holders interest. When your Certificate of Deposit reaches it's maturity date, you then have the option to take out the money you've invested and the interest it earned, or to roll it into another CD or other investment. If using Certificate of Deposits as part of your retirement planning strategy, you should consider a ladder strategy of opening CDs of varying maturity dates, or simply reinvesting your money at the end of each CD term until you need it during your retirement years.

Certificate of Deposits are considered a good option for retirement since they are a safe investment. Individuals who are conservative with their money and do not wish to take a chance using higher-risk investments appreciate CDs for their predictable earnings. In particular, people who are approaching retirement age need to be more conservative with their money than someone who is in their 20's. It makes sense to use Certificate of Deposits to hang on to the money they've already invested throughout the years.

For people who are already living out their retired years, Certificate of Deposits are a good way to help your savings earn more. Strategically investing your retirement money into multiple Certificate of Deposits that mature at varying time periods will give you access to a portion of your money each time one of the certificates matures - while the rest continues to earn interest.

Just remember that you can't withdraw the money from a Certificate of Deposit until the specified maturity date without paying a penalty, so you won't want to tie up all of your money in CDs. Take out what you need until your first Certificate matures and you'll never need to pay the penalty to get your money out of the CD.

Certificate of Deposits offer strategic and safe savings for individuals saving for retirement, as well as people who have already reached the Golden Years. You can feel confident that the money you save in a Certificate of Deposit will still be there (plus interest) when it reaches it's maturity date.




Debra Dragon is a freelance writer for DepositAccounts.com. She writes about how to make your money work better for you through various deposit accounts, including savings accounts, interest checking accounts, IRAs, and money market funds.





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2012年8月25日 星期六

Saving With Certificates of Deposit


Though they are somewhat of a staple of the financial services offered by banks, a large number of people aren't entirely sure how certificates of deposit work. They might know that certificates of deposit, or CD's, are usually purchased from a bank and that they last for set periods of time, but they might not know how savings are built with these CD's or what some of the terminology associated with CD investments mean.

The information below is meant to serve as an introduction to certificates of deposit, and should help to answer some of the more basic questions that you might have concerning CD's. As with any financial investment, it's important to make sure that you understand exactly how certificates of deposit work and how you can use them to augment your savings before putting your money into a CD. Check with your preferred bank for information about the specifics of their certificates of deposit or perform additional research online before investing your money.

How CD's Work

Certificates of deposit work much like common savings accounts, with the restriction that the money invested into the certificate is not to be withdrawn until the CD has reached its maturity. The maturity of a certificate of deposit is the point at which the amount of time that the CD was purchased for (also known as a term) has ended, and the CD no longer collects interest at the rate it previously was. Once a certificate of deposit has reached maturity, the full value of the CD can be withdrawn without penalty and the money is often transferred into other savings or into chequeing or money market accounts.

Maturity and Withdrawal

Since the money invested in a certificate of deposit will continue to draw a nice interest rate until the CD reaches maturity, it makes sense that you would be encouraged to keep your money in the certificate until maturity has been reached. Most banks and issuers of certificates of deposit don't want to be entirely unreasonable, however, and generally offer a brief period each year where the certificate can be cashed in before it reaches maturity without the usual penalties for early withdrawal. You should make sure that you know when this period is if you plan on cashing in your certificate beforehand, however... depending upon the issuer, some of the fines associated with withdrawal before maturity can be quite steep.

Choosing the Right Term for Your CD's

The term that you choose for your certificates of deposit will largely depend upon how long you want your money to draw interest before you need it. If you're planning on using CD's to plan for future events such as a wedding, additional schooling for your children, or retirement, you might want to consider a long-term certificate. If, on the other hand, you're wanting to use a certificate of deposit to set aside money for a vacation later in the year or another similar short-term circumstance, you don't want your money to be locked in a CD for an extended amount of time.

Using CD's to Enhance Your Savings

In order to use certificates of deposit to enhance your savings, it's important to remember that unlike traditional savings accounts you won't have as easy of access to your money in a CD. The advantage of this is that you can more easily resist the temptation to "borrow" from your savings. Several CD's with varied terms can help you to get the most out of your savings without locking all of your money away until a 10-year maturity date.




Jerry Warner writes general finance and loan articles for the Loans UK Online website at [http://www.loansukonline.co.uk/]





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Benefits of Having Certificates of Deposit Investments


The economy is up and down. Stocks are up and down. Heck, life is up and down. But, when it comes to investments, there is one vehicle above all others that provides safety and return. Those are just two of the benefits of having certificates of deposit investments.

Up until the FDIC was created in 1933, you really had to have a ton of trust in your bank if you were going to open of a certificate of deposit. Similarly to today, much of the trust had been eroded, and the FDIC was created to guarantee the deposits that the bank held. Up until last year CDs were guaranteed by the federal government up to $100,000. You can actually have far more insured if things are structured properly, but that is an article for another day. However, this last year, Congress passed, and President Bush signed into law a temporary increase to $250,000 that is set to expire 12/31/2009. So the first benefit, unlike your investments in the stock market, mutual funds, ETFs, etc., your principal is backed by the full faith and credit of the US Government.

Another benefit is a return on your investment. Depending on the term of your certificate of deposit, the bank pays you interest. The interest is commonly expressed as the APY (annual percentage yield). If you invest $100,000 and the bank is paying you 3.00% APY for a 1-year CD it is easy to calculate your earnings. Another hidden benefit of CDs, it isn't tough to figure out what you will earn. You simply take the $100,000 times 0.03, and you'll earn $3000. There are lots of places on the internet that have on-line calculators as well. If you open up a 5-year CD, you basically multiply the 1-year earnings times five. Another hidden benefit is the power of compounding. With the above example you would actually earn closer to $16,000.

So far, we have indentified four benefits of having certificates of deposit, safety, return, ease, and compounding. Other benefits are sleeping soundly at night, known income, and flexibility of terms. Common CD terms range from 90-Days to 5-years. Some banks offer longer term CDs of 7-years and 10-years and some offer really short-term CDs of 30-Days.

The last benefit is creativity. Because of their popularity, many banks and brokers have come up with creative CDs, such as step-ups. A step-up CD is where the rate changes at different set time periods. For instance a 16-month step-up CD may change its rate every 4-months. Usually, the start rate is a little lower than the average rates for the given term, but the average yield over all is higher. For instance it might start at 2.50% today. And then bump up .50% each increment. You would end up with a 4.00%. Averaging the rates would yield you 3.25%.

Another type of CD is the bump-up. This certificate of deposit gives you the option of bumping the rate a certain number of times during the term if rates rise. Again, the start rate is usually lower than fixed rates for the same term. You have to be careful with these though. I'm seen banks do things like offering the bump-up CD on an odd-term like 33-months and then never adjusting the 33-month CD rate or not offering the term until the original set expires.

Finally, some banks are creating variable rate CDs where the rate is tied to various stock indexes. This allows investors to have their funds safe and insured, but earn higher interest if the indexes rise in their favor. These tend to be fairly complex. With the stock market at current lows, this could be an attractive route, but read all of the details very carefully. If you think of any other benefits of having certificates of deposit, please leave a comment.




For more information visit our Best Bank CD Rates site or a Investing in CDs Wisely guide.





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What Is a Certificate of Deposit?


A certificate of deposit is a savings instrument similar to savings accounts, stocks and bonds and is usually available from any bank or credit union. They differ from savings accounts in that a lump sum of money is deposited into the certificate, also called a CD, and the money is held in the account collecting interest. CDs have different interest rates and terms, or length of time the money must stay in the CD to collect interest. Deposit and withdrawals are usually locked for the entire life of the CD, with the owner of the CD barred from adding or removing funds from the CD for the term of the instrument.

CDs are generally offered in several different terms and interest rates. Most are available in terms ranging from a few months to several years. Normally the higher the interest rate available, the longer the money must stay in the CD. One of the main differences between CDs and other money investing techniques is all the money in the CD is returned to the depositor when the term of the CD is completed. Unlike stocks or bonds, which can gain or lose money, CDs collect interest and are not invested in any other instruments.

Certificates of deposit are available from any bank or credit union and different institutions will have different options to choose from. A smart CD shopper should always shop for the best rate and a term that agrees with their investment style. Those looking to invest in CDs should always be aware of any penalties for early withdrawal of funds and have a plan on what to do with the money when the term of the CD is over. Most investors role over the money in a CD, once the term is met, into another CD with a higher rate. The interest earned on a CD can be paid to the depositor as soon as it is earned on the money deposited, or it can be rolled into the principle of the CD. All the funds, including interest, can be rolled into a new CD once the investment term is completed.




For more information on CD Rates [http://Rates.cd] visit [http://www.rates.cd].





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2012年8月24日 星期五

How to Get the Best Certificate of Deposit Rates


If you are looking for a way a low risk, short-term way to invest your money you might want to consider a Certificate of Deposit (CD). A CD is similar to a savings account in that it allows you to save money while you earn interest on it but because you can not withdraw your investment at will it is a much better option. They key to getting the highest return on the money you invest is to get the best certificate of deposit rates possible. A higher interest rate will yield higher earnings.

In many cases you will find that a broker will offer you the best CD interest rates. There are a few drawbacks with going this route. For one, they frequently require a much larger investment amount than a bank or a credit union. Often times they require a minimum investment of $10, 000 or more. Secondly, the risk is higher when you purchase from a broker because they may or may not be insured by the Federal Insurance Deposit Corporation (FDIC). You always have the option of specifically requesting an insured certificate of deposit or if the risk is too high for you, go to a bank or credit union. Lastly, brokerage fees can be ridiculously high. Make sure you know what the fees are up front before you purchase. You may find that you are better off going to a financial institution instead because the brokerage fees exceed the amount that you would make from the higher interest rates.

Pay close attention to the maturity date of your CD. Some financial institutions and brokers will automatically renew it when it matures if you do not specify otherwise. If this happens, you could potentially miss out on a higher interest rate because you are locked in at the old interest rate until it matures again. Rather than allowing them to auto renew the same CD when it expires, you are better off taking the money and reinvesting it into a different, higher rate one.

A long term CD is another great option if you are looking to make a long-term investment and you are not overly concerned about maintaining the absolute best interest rate. The longer you invest your money, the longer the bank, credit union, or broker has to make a profit from it. For this reason, they will offer a higher interest rate. It just makes sense to go this route because you are getting a great return rate on your investment, even if it is not the highest.

Getting the best rate on your certificate of deposit is not difficult. It just requires a little research and patience. If you are going to invest your money, why not get the highest return possible on it?




For more information on Certificate of Deposit Interest Rates [http://www.cdinterestratesguide.com/index.html] visit www.cdinterestratesguide.com [http://www.cdinterestratesguide.com] today!





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Earn a Risk Free Return With a Certificate of Deposit


Are you tired of the ups and downs in the stock market? Do you want to lock in a safe return for a designated period of time? A Certificate of Deposit is the best financial product to meet this goal for you.

A certificate of deposit is an investment vehicle that generates a virtually risk-free return on your investment. You agree to give the financial institution access to your funds for a certain period of time ranging from 3 months to 10 years. In return you receive a guaranteed return during that time frame.

Financial institutions are willing to give you this guaranteed return because they can generate higher returns lending your deposited funds in consumer and business loans. You get the agreed upon Annual Percentage Yield (APY) from the Certificate of Deposit, and if you invest wisely you don't have to worry about risk.

CDs can be risk free - Why take on additional risk?

That's right. When you invest your money into a CD it can be a risk-free investment if you are smart about how you're investing.

How are CDs risk free? The Federal Deposit Insurance Corporation (FDIC) offers deposit insurance on your total deposits at member financial institutions. FDIC insurance applies to deposit products including Money Market accounts, and Certificates of Deposits, up to $250,000.

If the bank fails and you're under the insurance cap then you won't lose any of your money, but some or all amounts over the deposit limit may not be recovered.

CD rates beat savings account rates - Make your money work harder

The national average for interest rates on saving accounts is 0.20% (at the time this article was published). This is a fraction of the returns that can be earned in other investment vehicles.

CD rates are typically higher and higher rates mean more interest earned for you. Even if you open a CD for only three months at 0.60% you're still earning triple what you would in an average savings account.

Use CD ladders - earn higher returns and enjoy liquidity, too

Despite the fact that savings accounts don't pay a lot in interest many people continue to use them because they want to have access to their money in a pinch. The fear of not being able to get to their cash keeps them from earning higher returns.

While it is true that you lock up your money in a CD for a period of time you can take steps to avoid a liquidity issue by utilizing a CD ladder.

To set up a CD ladder all you have to do is open a set of CDs that have different durations that divide well into each other.

For example, let's say you have $10,000 you want to put into CDs, but you don't want to put all of it into a 1-year CD. Instead you split the money into four different CDs: a three month, a six month, a nine month, and a twelve month. After three months your first CD will mature with $2,500 (plus interest earned). You roll that money into a new 12 month CD. After another three months your original six month CD will mature with another $2,500 (plus interest earned). You roll that money into a 12-month CD.

If you continue this process your CDs will be effectively "laddered", you'll earn higher interest rates, and you won't be without access to 25% of the funds for more than three months at a time.

If a 24 month Certificate of Deposit earns a 1.60% annual interest and a 24-month CD at another bank is only 0.74%, you can easily double the interest you earn over what the national average rate earns by selecting the best rate available.




Kevin Mulligan is a freelance writer on personal finance topics including retirement planning, finding competitive Certificate of Deposit rates, and paying down debt. Kevin holds a Bachelor's degree in Business Management. He has a passion for showing individuals how to budget and live a debt free lifestyle. Always looking for financial tips and advice from trusted institutions, he tends to look up information at http://www.discoverbank.com/ on a regular basis.





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FDIC Certificates of Deposit


Federal Department Insurance Corporation (FDIC) certifies and approves Certificates of Deposit (CD) so that investors are much secured and take low risks with their CD investments. How a CD investment works largely depend on your total of CD purchases for a certain period of time. FDIC Certificate of Deposit investment rates increase in a matter of six months to ten years or more.

To ensure the safety of your deposits, you must enter into an agreement where FDIC Certificates of Deposit are federally insured before tendering your investment money to any credit union or bank institution. Banks selling CDs must carry FDIC insurance. You must remember that CDs are famed investments because it is covered by the government up to 100,000 US dollars per person. It can go beyond that amount for certain investors even up to 300,000 US dollars.

Many business owners find FDIC Certificates of Deposit to be profitable venture. Aside from being safe, FDIC covered CDs provide a considerably fixed interest rate that do not normally deteriorate within a term. Before going into any CD investment, you must verify if the offers are being insured by FDIC, otherwise it would be risky to embark on. Checking if the bank bears the logo of FDIC would be wiser thing to do before investing. If you are dealing with a credit union, its site must bear the logo of National Credit Union Administration (NCUA).

After making sure that your potential partner in FDIC Certificates of Investment is insured by the government, you can double-check its financial performance in the industry. It's always smart to know the track record of the bank or credit union you're buying your CD investment from. Both NCUA and FDIC websites will assist you in getting significant information you need.

FDIC Certificates of Deposit are wise time deposits. For a period of a 30 to 365 days or even 20 years, you are venturing into an agreement that the bank will keep your investment. Most investors are investing for 1 to 5 years, and in the long run, your capital increases. The longer the duration of your CD investment, the higher your profit becomes.

When investing in FDIC Certificates of Deposit, you must not presume that FDIC insured one-year investment matures in one year. Know the maturity duration and confirm the interest rate and how you will get your money with interests back. Many brokerage firms or deposit brokers now offer CDs that in some cases offer higher rates of interest. Wherever your broker intends to deposit your investment, you must check if it is FDIC insured. You might also want to figure out the record-keeping standards your potential broker is implementing. This is to assure that your investment is secured.




Ian Pennington is an accomplished niche website developer and author.

To learn more about certificates of deposit [http://cdinvestmentnow.info/fdic-certificates-of-deposit], please visit CD Investment Now [http://cdinvestmentnow.info] for current articles and discussions.





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2012年8月23日 星期四

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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Certificate of Deposit Interest Rates - Things You Should Know


The most important aspect of a certificate of deposit (CD) is the interest rate. After all, it would not make any sense to invest your money into something that has no return associated with it. It is important to know as much as possible about how interest rates work before you purchase a CD.

The interest rate that you get when you purchase a CD generally depends on several factors such as the amount you invest, the length of time you invest for, and the issuing financial institution that you are dealing with. For example, if you invest the minimum amount allowed for a short period of time, your interest rate will probably be lower. However, if you invest a large amount of money into a long-term CD, there is a good chance that you will be offered a higher interest rate.

In most cases, you will get a fixed interest rate with a certificate of deposit although they are available with a variable rate. With a fixed interest rate you are locked in at the rate that was assigned at the time of purchase. However, some issuers do offer a no penalty feature, also known as a "bump up" feature. This feature allows you one chance to bump up to a higher rate before your maturity date without being assessed a penalty. Normally, the only way to accomplish this would be to withdraw your money early and reinvest it into a higher rate CD, in which case you would be charged an early withdrawal fee.

As noted above, if for some reason you decide to close your CD before it expires, you will be charged an early withdrawal fee. That does not necessarily mean that you can not receive the money that you make from the interest on it. Many financial institutions will allow you to periodically withdraw just the interest earned without penalizing you but be aware that if you do this you will be decreasing the amount that you would otherwise earn if you leave it alone until it matures.

Ultimately, you want the highest interest rate possible with your certificate of deposit. There are some things that you can do to help you get it. Purchase it from your local hometown bank because they tend to offer better rates than the bigger, well known banks. Although it is not advisable, forgoing FDIC insurance could also help raise your interest rate. It also raises the risk level associated with your CD. Lastly, make sure that you are purchasing a personal certificate of deposit and not a business one.

Before you run out and purchase a certificate of deposit, arm yourself with information. Know what the best interest rates are, who offers them, and what stipulations are attached to them. Do not settle for the first offer you come across as you could lose out on a lot of money. While there are other important factors to take into consideration when purchasing a CD, it is the interest rate that determines how much of a return you will get on your investment.




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A Certificate of Deposit is Great For No Risk Investing


People are always looking for the next way to get rich quick. Unfortunately, there is really no legal way to do so unless you manage to score that winning lottery ticket. In this day in age, where fast food and text messaging rule, the virtue of patience has all but flown out of the door. It is easy to dream of ways to turn your ideas into money. It is easy to think about what you should have done with your money, such as buy stock in Apple twenty years ago. While these ideas may help you fall asleep at night, they are just not productive. The present is what matters and being smart with your money is the key to getting ahead. Many people are under the false belief that investing is a practice reserved for bankers and elite business people. Although stock market trading and investing may be best suited for those with some knowledge of the industry, buying into a certificate of deposit is something anyone can and should do.

The stock market is something that the average individual will probably never understand. What stocks to buy, when to sell, when to trade, and how much to invest are questions best left to the professionals. It is a very lucrative industry that has made a lot of people very wealthy. On the other hand, for those that jump into it without doing the proper research, it can deal a devastating blow. With stock investing, the investor must pay close attention to their stocks in order sell or buy at the right time. They must track other stocks for potential trades or purchases. It is a time consuming process that, when done improperly, can destroy bank accounts. When thinking about making an investment, it is important to know what you are getting into and how much time and money you can realistically invest. For those with the time, energy, and expendable income necessary, stocks are the way to go. For the rest of society, finding an investment with a guaranteed yield that pays relatively quickly is the smartest way to go.

Finding an investment with a high interest yield that does not tie up your money for years probably sounds impossible. However, there is a simple product available that almost anyone can understand and gain access to. While a certificate of deposit may not produce millionaires, it is one of the best options available to the average investor.

The best part about purchasing one is the high interest you can earn from the money you put into it. Depending on how much you invest, you can count on relatively large returns. With so many certificate of deposit options, the power of your investment remains with you. They are available in terms as short as six months to as long as a couple of years. How long you want your investment to grow is entirely up to you. The main difference between this option and a product like a savings account is that your money must stay put for the duration of your investment. The longer it stays, the more interest it accrues. The most important difference though, is that it earns considerably higher interest than any savings account. As opposed to investment options such as stock trades, a certificate of deposit is a no risk venture. The rates remain unchanged and the investment is guaranteed under federal law.

It is important to make wise decisions with your money. Keeping it tucked away under the bed or buried in the back yard may protect it, but it will never produce any positive returns. Stocks can produce very large returns, but also have the potential to crash down to nothing. The safest and wisest way to store your money is with a certificate of deposit. Making money off of secured money has never been easier.




Andy West s a writer on a variety of topics, including investing. With the recent sting that investors have felt as their accounts have dwindled, they look towards less riskier types of investing including a certificate of deposit.





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Equity-Linked Certificate of Deposits


People who prefer to invest their money in risk-free deposit account options tend to look at the standard banking products - high interest savings accounts, CDs, money market deposit accounts, IRAs, etc. Some may get a little creative and look into annuities. If you feel the need to have an equity-indexed annuity type of investment in your portfolio, chances are you would be interested in a little known investment called an equity-linked certificate of deposit. It's a lower cost alternative to annuities that allows you the peace of mind of having your principal deposit guaranteed by the Government yet still benefit from the growth of the market index.

Insurance agents selling equity-indexed annuities get up to 13% commissions! They often pitch these annuities to seniors because of their general risk avoidance tendencies, but some people lose out big time financially if they need to pull their money out sooner than planned. In addition to losing the 13% commission paid to the agent, people who must surrender their policies early end up paying steep surrender penalties and various fees to access their money.

A good alternative to annuities are equity-linked certificate of deposits. They have many of the same benefits that equity-indexed annuities offer, but fewer disadvantages- including far less fees.

Instead of purchasing an equity-linked certificate of deposit through an insurance agent like you would an equity-indexed annuity, you buy them from a bank and bypass the 13% agent commission. The equity-linked CDs pay returns based on the S&P 500 (or other stock market index) and they are federally insured up to $100,000 per individual by the FDIC, like all other certificate of deposit products. Equity-indexed annuities are not FDIC insured. There are a handful of equity-linked certificate of deposit options with a small $1,000 minimum, but the majority require a deposit of $25,000 or more.

You are one hundred percent safe against losing your principal deposit in an equity-linked CD, unless you pull your money out before you've reached the end of your term. There will be a early surrender penalty of some form if you withdraw before the term, however, there aren't big commissions being paid to agents in order to open the CD so the redemption penalties are much smaller than you would pay if you had an equity-indexed annuity and needed to access your money earlier than planned. Equity-linked CD's have shorter term commitment options than equity-indexed annuities.

While the advantage of an equity-linked certificate of deposit are obvious, there is also a disadvantage to consider if you intend to invest in one. These CD's don't typically pay interest until they have matured, so if you're looking for an investment that provides steady income - you won't want to consider an equity-linked CD.

Why haven't you heard of equity-linked certificates of deposit before? It's simple: they don't have the large commissions that equity-indexed annuities and other investments offer agents, so they are not recommended as often. There isn't a financial incentive for the financial advisor to steer his or her clients toward an equity-linked CD.




Debra Dragon is a freelance writer for DepositAccounts.com She writes about how to make your money work better for you through various deposit accounts, including savings accounts, interest checking accounts IRAs, and money market funds.





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