Certificate of Deposit: Return

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2012年9月2日星期日

Use A Certificate Of Deposit Calculator To Earn The Highest Rates Of Return

Not all certificates of deposit are created equal. Now that investors can use the internet to find the best deal and the highest rates of return on these and other investments, it is more important than ever to compare different rates. This ensures that you have the right investment to meet your financial goal and one that will earn you the highest rate of return for the amount of risk that you are willing to accept. The easiest way to compare the plethora of certificates that are offered by banks and investment firms is by using a calculator.

What Is A Certificate of Deposit Calculator?

It is an investment that offers a fixed interest rate and a set maturity rate. If the investor tries to cash in his or her CD before its maturity date, then there are early withdrawal fees and penalties. Also simply known as a CD calculator, is used to find out how much interest can be earned on a specific certificate of deposit. The investor simply has to enter a few pieces of information, and the calculator will analyze the annual percentage yield (APY) and the ending balance you can expect to receive from the investment. To use calculator, the investor will need to input data such as how much his or her initial deposit will be, the total number of months that will be invested, the published interest rate of the CD, and how often the interest will be compounded.

Why You Should Use A Certificate of Deposit Calculator

The calculator will show you the annual percentage yield which measures your actual interest earned per year and the amount of compounding interest. The annual percentage yield is a great way to compare different CDs with each other. The purpose of the certificate of deposit calculator is to show the investor how much interest a particular CD will earn. In order to earn the highest interest rate possible, an investor will need to compare maturity dates, interest rates, withdraw fees and penalties, the amount invested, and other attributes. A calculator is a great tool to use to compare these factors in determining the differences between each type of certificate of deposit and other investments with one another.

Hank Coleman is the founder of several financial blogs, focusing on topics such as how to find the best certificate of deposit rates and other profitable investing opportunities. 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24日星期五

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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2012年8月22日星期三

Lock in a Rate of Return With a Certificate of Deposit

If you have a bank savings account, you've probably noticed that the interest rate on the account has been steadily decreasing. Do you want to make sure that your rate won't get cut by the bank anymore? Lock-in an interest rate with a Certificate of Deposit.

The CD (short for Certificate of Deposit) is a bank product that gives savers a fixed rate of return for a specific period of time. That means no surprise rate cuts. The rate you get the day you deposit your funds will be the rate you earn for the entire term of the CD.

During the term of the CD, you can't access your principal (the amount you deposited) without incurring a penalty, but you get rewarded for the lack of access with a bigger interest rate than on a savings accounts.

How long the CD term runs is up to you. You can choose a term as short as three months or as long as ten years. In many cases, the longer the term of the CD, the higher the interest rate you get - but this isn't always the case. A bank may need a quick infusion of deposits and may offer a special high rate on a short term CD.

When the CD matures, banks will give you a grace period to close the CD account and withdraw your money.

During the grace period, you can choose not to close the CD and even add money to the account. In this case, at the end of the grace period, the bank will "roll over" your CD for the same time period as before, but at the then current rate which could be lower or higher then the original rate. It's like opening a new CD without having to re-apply.

Besides the "regular" CD described above, you may encounter some other types of CD accounts. The concept is the same, but there may be a few extra perks. For instance, you may come across a "Penalty-free Withdrawal CD." This CD will allow a depositor to withdraw funds a certain amount of times before the CD matures without penalty. The obvious benefit to this CD is that if you need some of the money before the CD matures, you'll get fee-free access to it. The downside is that usually the rate on this type of CD will be lower than on a regular CD with a comparable term to maturity date.

Where can you get a CD? Certificates of Deposit are offered at most local banks and credit unions. But don't neglect to check the rates at online banks. Many online banks (also called Internet banks) can offer higher CD rates because they have lower overhead expenses than a local brick-and-mortar bank.

Visit eMoneyCentral.com to get daily updates on the highest CD rates available at online banks.

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2012年7月28日星期六

Where Can the Average Person Put His or Her Money & Get a Very Sizable Return With Very Little Risk?

Have you lost a large percentage of your investment funds over the past three years because of the real estate crash and/or the stock market crash? Are you still keeping what is left of your investment money in an FDIC insured bank account that offers you a minuscule return of a fraction of a percent on your money? If you are or were investing your money in one or all of these three arenas, then you know what I am talking about.

Most investors have had their investment money reduced substantially and are desperately searching for a place to invest what is left of their money that not only offers a great safety net to protect what they have, but also offers a rate of return averaging 12% to 18% apy. This sounds kind of wild and risky to the average person, but the risk is very minimal and the rate of returns are fantastic. These little known investments are known as Tax Certificates or Tax Lien Certificates.

The average person usually asks 'what is a tax certificate?' A Tax Certificate is a lien placed on a person's real estate property when the property owner does not pay his/her yearly property taxes. When a property owner does not pay his/her real estate property taxes, the county will place a lien on that person's real estate property and issue a Tax Lien Certificate. The Tax Certificate represents the outstanding taxes on the property. Several states allow the tax certificate to become a first lien on the property. If the tax lien certificate is not redeemed by the property owner then the county sells the tax lien certificate at a county held tax certificate public auction sale. After placing a successful bid on tax lien certificates, the buyers of a county government issued tax lien certificate will then get one of two things: either a state-mandated yield up to 18% APY from the tax lien certificate, which the delinquent taxpayer must pay in order to release the tax lien, or Title to the property after a certain amount of time if the delinquent taxpayer fails to pay his/her property taxes.

Real estate has lost about 20% of its peak value over the last three years, but this has very little affect on Tax Certificates. Most Tax Certificates are priced at about 1/2% to 5% of the real estate properties true value. The real estate itself is the security that the Tax Lien Certificate and its high interest amount will be paid by the property owner or another interested party. If the taxes are not paid then the property will be auctioned off by the county at a county Tax Deed auction. Currently most Tax Certificates have an annual yield between 12% and 18%. The percentage amount is set by each individual investor during the county held auction and is the minimum percentage apy the investor is willing to receive.

Most of the Tax Certificates issued to investors are redeemed by the property owner or other interested parties over a period between three months and three years. The property owner must pay the investor's original investment he/she paid to acquire the tax certificate plus the property owner must pay all the accumulated interest money due to the investor to the issuing county before the lien is released from the property. Usually within 7 to 10 days, the issuing county mails the investor's check (with all past due interest) to the investor's mailing address. The investor usually has a very passive investment (basic accounting and cashing the check are all that is required). Many counties also offer direct deposits, which makes it very user friendly for the investors of Tax Lien Certificates.

For free information to learn more about Florida Tax Certificates and Tax Deeds please visit my website: http://www.taxcertificates4sale.com.
http://www.usinflationcalculator.com/inflation/current-inflation-rates/
http://en.wikipedia.org/wiki/Tax_lien

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2012年5月24日星期四