Certificate of Deposit: Certificate

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2012年9月18日星期二

What Are the Advantages of CDs (Certificate of Deposit)?

Certificate of Deposit is one of the best manners that are often resorted by many in the country - it is often considered as a safe investment. Plenty of choices and options are already in existence on the niche of investments. However, the risks associated with CDs, in comparison to the other types of investment procedures is marginal. This is the primary reason that attracts a vast majority of the population. We always select the best investment plans out there, because we wish to make good use of our hard earned money.

Allow me to emphasize on the returns that can be achieved with CDs. It has become quite customary for financial experts to compare CDs with a savings account. According to them, CDs and the saving account function similarly. However, the profit that is bestowed to you is always greater if you pick out a certificate of deposit plan. In fact, the same investment procedure is advertised with much pomp and show in the social circles by various investment agencies. Have you ever wondered, why many financial organizations publicize such investment schemes? If you look closer, you will realize that you are in turn providing them with a great favor - this will be explained in the following paragraph.

The institution often utilizes the sum that is deposited as CD for various other purposes. Think about the bigger picture. Hundreds will opt for the same investment plan. CD is often associated with a maturation time-period. In simpler terms, the longer the cash remains with them, the better it works out for the financial organization. What do they do with your money? They will invest on other ventures and a part of the profits will be handed over to you. This is how the entire system is noted to function.

Starting a CD account with the nearest financial organization is simple. You will have to complete the preliminaries, which include filling up certain forms. The interest rates are often fixed, and you will be given two options to do away with the interest amount. If you would like to spend the amount on consumables, you can request for the same. Or else (this is what the intelligent is noted to do) you can ask the same organization to deposit the same interest amount to the existing CD deposit. In effect, you are simply multiplying your returns for the greater good.

Now that you might have understood how CDs perform, there remains another vexing query. Which is the best CD plan to be chosen? I will quote the words of financial experts - always stick to those plans that have a high maturation period. As with all the other types of investment plans, high volatility is subjected to the certificate of deposits. In simpler terms, you will be given the option to fix the interest rates. The exact opposite is also prevalent; but it is considered too risky for a nonprofessional who has limited funding sources.

The internet is the best place to initiate your search for the best CD plans. Quite often, quotes will be provided to interested customers. You will have to compare the quotes and come to a favorable decision. Although the niche is slated to be "risk free", the existing economic conditions play a pivotal role in deciding the feasibility of the CD.

Brittany Stanzas is a professional finance writer who works for http://www.zuuply.com if you want more information on CDs feel free to check it out.

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Keeping Your Money Safe and Profitable Through Certificate of Deposit

Nowadays, there are several financial institutions that offer several kinds of services. With the economic ordeals that hit almost everyone, people who were able to save some money are being meticulous in choosing which financial institution to keep their money. Few decide to just keep it at home instead people will always look around for the best financial institution that will ensure their money is safe and earning the most. As much as there are numbers of financial institutions, the types of accounts that you can open also varies.

If you have a significant amount of money to save and you are confident that you will not need it for quite some time then you will be interested in buying certificate accounts. It is a type of investment with fixed deposit structure that you can acquire either from banks or lending institutions. Investors need to deposit funds in a certain timeframe which ranges from 3 months to sixty months or more in order for their money to acquire higher interest rates. Similar to the conventional savings account, certificate of accounts are protected and insured by government agencies.

Banks and credit unions have set specific minimum requisite amount of deposit for people who are interested in buying certificate accounts. Naturally, if you want your money to acquire higher interest rates, you should make higher deposits. In return for the deposit made, the buyer gets a certificate that indicates the necessary details to seal the agreement such as term of deposit, interest rate and the maturity date.

When the deposited money reaches maturity, the principal amount and the earned interest will be awarded to the depositor. In order for the banks and credit unions to keep their business through the number of clients retaining their deposits in a long term investment, heavy penalties are imposed to early withdrawals. Such penalties can be of different forms; either through interest rates earned on a quarter or it can be the overall interest rates for the whole duration of the deposit. It depends on which type of financial institution you deposited your money to. So as not to repel investors, some banks have introduced a different structure of certificate of accounts giving its investors the flexibility of making use of their money in a staggered basis so they can use it in some other purposes.

It is wise to look around before letting your money go to any financial institutions. You are not giving your money away, of course, but the fact that your money has the tendency to sleep with low interest, you might as well find the best options of saving and the best place to keep it. Identify your goals with their corresponding time lines in order to come up with a better decision that has been well thought of before buying certificate of accounts.

Unless you are truly confident that you will not have a need for the money you will be using to buy the certificate of account, consider finding other options that will not impose any penalties when withdrawing your money. Make sure to discuss penalties with your bank or credit union so you are aware of what you will lose in case you have to withdraw your money earlier than the maturity date.

Savings accounts San Luis Obispo can be found at top-ranked, local credit unions. Check into your different options at sites like http://www.coasthills.coop/.

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2012年9月17日星期一

FDIC Creates a National Certificate of Deposit Rate

Starting January 1, 2010, under capitalized banks have to set rates at or below the Weekly rates that the FDIC publishes. Search for "fdic weekly national rates" in your favorite browser for the current certificate rates.

Most frustrating is that even healthy banks are deciding to follow the rate cap. I guess they decided that if the FDIC thinks those are "good" levels they should too. Numerous banks are even setting their rates lower. There has even been rumors of pressure from bank examiners saying, healthy or not, they should not be paying rates above the cap.

I didn't really see this as the outcome the law would have, frankly. I hoped it would make it harder for the unhealthy banks to raise deposits and thus decrease potential losses to the FDIC. I see just the opposite occurring. With the many healthy banks posting lower CD rates, the unhealthy banks are still quite able to easily attract deposits.

Never the less, it is extremely disheartening to see the government stepping in so vigorously to basically regulate the certificate rates that banks offer. Another interesting note, although banks have not strayed too far from the government rates, many are still out there with high yield savings and checking account specials.

Another fascinating development: banks work around the caps with creative penalties. As an example, we have seen a few banks with 2-Year rates with a zero penalty after 1-year. That effectively allows them to use the higher 2-year rate for a 1-year CD. This just goes to show you that ingenuity can "trump" restrictions placed by the government. Also goes to show you that governmental restrictions are rarely thought out well enough and often have the opposite effect of what was hoped or intended.

Two good notes. Credit Unions are not regulated by the FDIC and thus have no rate cap. There are still a few out there posting 2% or above for 1-year CDs. Some banks have low early withdrawal penalties such as 90-Days or 180-Days for 5-year CDs. Some of the rates are well above 3.00% and if you calculate the 2-year and 3-year equivalents, well above other banks offering those terms. By the way, we can do the calculations if you ask us nicely.

In summary, the government can try to regulate rates, but banks will be as "creative" as they always are to work their way around them.

Looking for Certificate of Deposit Rates, give us a visit.

Chris Duncan is a FINRA Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Visit us at http://www.jumbocdinvestments.com.

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Top IRA Certificate of Deposit Rates - October 2009

The big player seems to be Alliant Credit Union. Believe it or not you can find CD rate specials here frequently. If you are a current member the process is much faster than trying to become a member and then completing a certificate of deposit. So even if you run out of time, I think it would be a good idea to open a membership. The hardest thing is Alliiant won't lock the rate beyond the current day. So if you put the IRA process into gear and the rate drops, your out of luck. Anyone can become a member by first joining the National PTA. This is $25, I believe. You then can complete the Alliant member application. Be forewarned that their online process has proven difficult for many in the past. It asks a series of questions about information it pulls from the credit bureaus and I've known several people that claimed the information was erroneous and thus they couldn't complete it online. You can always go the route of snail mail if necessary. The current IRA rates are:

1y -- 2.30% APY

2Y -- 2.55% APY

3Y -- 3.00% APY

5Y -- 3.25% APY

Their NCUA# is 67955 and they are based in the windy city of Chicago, IL. They are large for a credit union with over $6 Billion in assets. As of March 2009 data, they have a 4-star rating.

Another big player is Ally Bank, but they don't offer rates for IRA CDs. People's Trust Federal Credit Union has an 18-month IRA for 2.12% APY. They are based in Houston, TX. They have a 2-star rating. People's NCUA # is 177. Looks like they have been around for a while. I did have to make quite a few clicks to get to the rates. I hate that. This is true for many banks and credit unions. They really should make it much easier.

If you're wanting to stick with a bank try Nationwide Bank, FDIC# 34710. Their process isn't too difficult. They are about $2.25 Billion in assets, had a nice second quarter profit, and 4.5 stars. Rates are:

1Y -- 1.95% APY

2Y -- 2.35% APY

2Y -- 2.25% APY

3Y -- 2.45% APY

I think that is a pretty good window into IRA rates across the internet. Let me know what you are finding.

Happy Investing.

cd :O)

Chris Duncan is a NASD Registered Representative. He specializes in helping clients find the best and highest CD rates nationwide. His clients include individuals, financial institutions, corporations, and public agencies. Check out our CD Rates offers or our California CD rates

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2012年9月16日星期日

Types of Certificate of Deposits

For anyone who is interested in saving money, there are a number of options for your money. You can simply deposit it into a savings account, where it will be easily accessible and return low interest on your money. You can also place it into a money market account, where your money will be less accessible but the return on your money will based on a much higher interest rate. Certificate of deposits are another option that you have for your money, but they operate slightly different than a savings or money market account.

A certificate of deposit is basically a certificate the bank gives you in return for you depositing your money into their accounts. These certificates come with a certain amount of time that has to pass before you can get your money back. Some certificate of deposits last for 3 to 6 months, and some last for 1 to 5 years. The interest rate that the bank offers is a fixed rate, meaning that your money will earn the same interest every month until the term is completed. That is a good thing in an economy that is constantly fluctuating, and using the certificate of deposits is a great way to guarantee that you will steadily earn money from the money you are saving.

An advantage to using these certificate of deposits is the fact that the interest rates the bank offers you for your money are usually fairly high. All the interest rates are higher than those offered by savings accounts, and some are higher than those offered by money market accounts. Many banks even offer certificate of deposits that have a variable interest rate, or a rate that the consumer can adjust at different times during the term of the bonds. CDs are an excellent choice for your savings, because the money is insured by the FDIC.

Bump-up certificate of deposits lets you change the interest rate of the deposit according to the performance of the money market. The adjustments can be made during the bond's term, and allows you to increase your interest rate if the overall interest rates on the market increase.

Liquid certificate of deposits are perfect for those who need to access their money but still want to earn a good interest rate. There is a minimum balance that needs to be maintained in the Liquid CD, but you can take out money before the bond matures if needed.

Zero-coupon certificate of deposits are interesting, giving a consumer the option to buy discounted CDs to be redeemed for full value upon the maturation of the bond. For example:

A bond's face value is $100, but the Zero-coupon CD allows you to purchase the bond for $80 but redeem it upon maturity for the full $100.

Callable certificate of deposits are CDs that the bank or financial institution can cash out after a predetermined period of time. An example of a callable CD is a CD that matures in six months, but allows the bank to redeem the CD in three months. This is important if the money market is performing poorly, as it lets the bank cash out before the bond matures without being forced to pay the high interest rates.

2011 Best CD Rates are available at ComplexSearch, a blog that tracks the best bank rates. Find out the current Ally Bank CD Rates, Chase, Wells Fargo, Bank of America, etc.

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2012年9月15日星期六

Comparing A Money Market and a Certificate of Deposit

As investors, we all face common problems. Where can I find the best rate of return? What is a good stock to invest in? What do I do with my money in between investments? With the first two questions, limitless answers can apply. However, with the last question, there are two popular alternatives. A CD or money market account are both viable choices that should be investigated. But which one will give you the most bang for your buck?

CD's or certificates of deposit are basically like you giving the bank a loan. You give the bank a certain amount of money and they give you a certain amount of interest. The interest rate that you get is proportionate to how long the investment is. Before you ever deposit your money into a CD, you decide on how long the money will be invested. The longer you invest, the higher your interest rate will be. This is why older people are notorious for having many CD's because they simply want to keep the money they have at a reasonable interest rate.

CD's can range in time frames from a few weeks to years. It all depends on the investor. The bad thing about CD's is that you don't have access to your money. If you decide that you need to get your money out of a CD before it matures, you will probably have to pay a fine. So if you get a CD, your money is officially tied up.

The other popular choice is a money market account. This is basically like an investor's checking account. Whichever investment firm you have will take the balance from your money market account and invest it into mutual funds and other securities. With this form of investment, the rate of return is directly proportionate to how much money you have in the account. It is not linked to a certain time period as with a CD. This means that if you don't have very much money, you won't make any interest. The main benefit with these accounts is that you have access to the money at any time. Most financial institutions will give you a checkbook that you can use like you normally would. The bad thing is, many people will treat it as an actual checkbook instead of their investment money.

Whichever form of investment you choose, make sure it's the right one for you. They both have positives and negatives that you should consider, before making a choice.

Find the best CD Rates at http://www.gotalkmoney.com/

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Cash in Or Borrow From Your Certificate of Deposit to Get Quick Cash

There are two ways that you can get quick cash from your Certificate of Deposit.

Most people are aware that they can cash in their CD early if they need access to immediate funds. Of course, the problem with doing that is that you will pay a hefty penalty for doing so. The penalty for early withdrawal differs but usually it is between three to six months' interest. But cashing in your CD isn't the only alternative that you have to get cash from your CD.

Another option is to borrow against your Certificate of Deposit. You can generally borrow up to 95 percent of the value of the CD Before you decide to do this you should be relatively sure that you will be able to repay the loan. Otherwise, you may lose part or all of your investment. That being said, this is a quick, flexible, and low cost way to get some fast money.

The good thing about using this method is that the CD will still earn interest for you during the life of the loan. The interest you pay on the loan will be 2-3 percent above what you are earning on the CD. However, note that you will also have to pay a loan origination fee.

You should also be aware that most banks will only lend you money against CD's that you have in that particular bank. These days you'll have a difficult time going to Bank 1 and asking them to loan you money on a CD that you have in Bank 2.

Naturally, each bank differs as to repayment terms. However, your repayment choices will likely be varied and flexible. You will probably be able to pay principal and interest, or principal only, or interest only.

Before deciding whether or not to borrow against you CD, you should compare the cost of the loan against the cost of the penalties associated with a cash out of the CD.

Here's Hoping Some Quick Cash Comes Your Way!

Need Quick Cash Visit us today at quickcashcorner.com

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Annuities - Equity-Linked Certificate Of Deposit - The Safer Low-Cost EIA Alternative

Equity-Linked Certificates of Deposit are a safer, low-cost alternative for those who must have an Equity-Indexed Annuity type of investment. These little-known investments allow you to participate in the growth of the market index while your principal is guaranteed by the Government. Read on to find out more.

Equity-Indexed Annuities are probably the most heavily promoted investment for seniors in today's marketplace. The sales pitch is appealing and the payoff to the agent is very big--up to 13%. The enormous commissions have led to sales abuses which leave seniors holding the bag.

Readers of this column have wised up to the flaws of Equity-Indexed Annuities. But what are the alternatives?

The best alternative to Equity-Indexed Annuities is to use a diversified mix of investments and strategies that can provide an income stream between 6% and 10% while limiting any risk of significant loss. That's what I do for my clients--without long-term time commitments or surrender penalties if they want access to their money.

Another alternative is called an Equity-Linked Certificate of Deposit. They provide virtually all the benefits that Equity-Indexed Annuities are designed to provide, without all the negative strings attached.

Equity-Linked Certificates of Deposit are offered by banks. They pay a return that is based on a stock market index, usually the S&P 500. Just like all Certificates of Deposit, they are federally insured by the FDIC up to $100,000 per individual. The minimum purchase for an Equity-Linked Certificate of Deposit is usually $25,000, but some can be found with $1000 minimums.

The return is based on the average performance of the S&P 500 over a set period of time. Just like Equity-Indexed Annuities, how the return is calculated depends on the issuer. The returns are all based on averaging the gains or losses of the index at set points over the life of your contract. Some Equity-Linked Certificates of Deposit guarantee a 3% return. Those doing so will limit the index return. Others provide 100% of the calculated index return.

The only way you can lose your principal with an Equity-Linked Certificate of Deposit is if you pull your money out before the end of the term. Most will have some form of a penalty, but since there wasn't a big commission paid to an agent to sell it, the redemption penalties should be small. (Some don't allow early redemption so investigate before you invest.) All allow early redemption without penalty if the account holder dies.

One of the major benefits Equity-Linked Certificates of Deposit have over Equity-Indexed Annuities is a short term commitment, FDIC insurance of principal, and much lower fees. They allows you much more control and flexibility.

For instance, let's say you intend to invest $75,000 in Equity-Linked Certificates of Deposit. Instead of putting all the money in a single CD, divide that money between three--purchasing one each year for three years. Then as one comes due you can roll it into another 3-year term. This will reduce the negative effects in how the index returns are calculated while giving you access to $25,000 every year.

There are several disadvantages to Equity-Linked CDs. They don't normally pay interest until maturity, so these investments are not a good choice of those looking for steady income. And like Equity-Indexed Annuities, you don't really get 100% of the market gains because of the averaging used in calculating the rate of return.

You may be wondering why you haven't heard of Equity-Linked Certificates of Deposit before. In fact, you should wonder why the advisor recommending you buy an Equity-Indexed Annuity hasn't recommended them! The reason is they don't pay a large commission so there isn't a financial incentive for the advisor to do so.

Check with your local bank to see if they offer Equity-Linked CDs. Not all do, but they are becoming more widespread. Any broker or advisor that can sell bonds should also have access to Equity-Linked CDs.

I still believe there are better ways to invest your money than Equity-Linked CDs. But I'd much rather see someone invest in them than an Equity-Indexed Annuity. Don't let advisors who stand to gain so much from your money pressure you into investing in an Equity-Indexed Annuity when an Equity-Linked CD is a much better alternative.

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2012年9月14日星期五

Always Get the Insured Certificate of Deposit Rates (CD)

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

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

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

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

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

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

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

Read my reviews about term deposit rates, and gold buffalo proof from my websites.

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What Is An IRA Certificate Of Deposit And How To Use It In Your Retirement

There are many different financial products that can help an investor save for retirement. One of the most popular investment products is the individual retirement account, also known simply as the IRA. IRAs can come in several varieties. There is an IRA for every type of investor and his or her tax situation. Traditional IRAs allow individuals to invest in usually mutual funds on a pre-tax basis where the investor would be taxed at the time of withdraw. There is also a Roth IRA which enables an investor to use after tax dollars to invest in a mutual fund and withdraw all of the capital gains, interest, and dividends tax free in retirement. There is also a self-directed version of both the Traditional and Roth IRAs where investors can dictate the types of investments that are held in the retirement account. An investor can hold individual stocks, bonds, certificates of deposit, real estate, options, and a host of other investments in an IRA.

What Is An IRA Certificate of Deposit?

Inside an IRA, an investor can own a certificate of deposit which can also be referred to as an IRA CD. An investor can own either a traditional IRA or a Roth IRA with certificates of deposit inside the accounts. An IRA CD is simply a regular certificate of deposit which is contained within an IRA account earmarked for retirement savings. Most brokerage firms can help investors set up self-directed IRA and purchase the securities such as a certificate of deposit to place inside the account. With a Roth IRA CD, you receive the tax advantages of a Roth IRA with the enhanced security that comes from owning a certificate of deposit.

How To Incorporate IRA CDs In Your Retirement Nest Egg

While most retirement accounts contain stocks and bonds, certificates of deposit can provide a larger rate of return on an investment portfolio's cash position rather than just parking the money in a savings account. Using an IRA, whether it is traditional or the Roth version, can help you shield a portion of your assets from taxes either now or in the future.

An Individual Retirement Account (IRA) is one of the most versatile investments a person can own. The limits of what an investor can do and invest in with these types of accounts are almost only limited by his or her imagination. Certificates of deposit inside an IRA provide investors an additional alternative to the standard savings account.

Hank Coleman is the founder of several financial blogs, focusing on topics such as how plan for retirement and find 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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Finance Basics: Money Market Funds: Treasury Bill, Commercial Paper, Certificate of Deposit

Some Basic Financial Terms and Definitions

Credit Risk

Credit risk is the risk of default of a security. The higher the risk, the higher the yield of the security has to be to be attractive to investors.

Liquidity

Liquidity is measured according to how easily a security can be converted into cash.

Tax Status

The tax status of an investor matters when investing in securities. The higher the tax bracket of the investor, the more taxes need to be paid on the gains/yield of a security.

Term to Maturity

The term to maturity is a specified term of time (days, months, years) that a security needs to exist to mature.

Call Feature

The call feature is an option that allows the issuer of a bond to buy bonds before the maturity date back, at a specified price.

Conversion Feature

The convertibility clause allows investors to convert bonds into shares of common stock. This is beneficial if the market price of a bond decreases, because an investor will have an additional option of converting the bonds into a specified number of shares of common stock, rather than selling the bonds in the market.

Common Instruments of a Money Market Fund

Treasury Bills

Treasury bills are highly liquid, short-term securities issued by the government to borrow funds from investors. Treasury bills are typically sold through auctioning on a weekly basis; however treasury bills with a one year maturity term are issued monthly. The lowest amount of a treasury bill (par value) is $1000 and thereafter in multiples of $1000 and is sold at a discount rate of the par value whereas at the maturity of the treasury bill, the investor receives the par value and therefore has a profit between the par value and the discount price he/she purchased the treasury bill at. A benefit of treasury bills is that they are free of credit default risk, because they are backed by the government.

Commercial paper

Issued primarily by finance and bank holding companies with a maturity date between one day and 270 days, commercial paper is a short-term debt instrument with a goal to either provide liquidity or finance a company's investment. The minimum amount investment in a commercial paper equals $100,000.

Negotiable certificates of deposit

NCDs are short-term certificates with maturity terms ranging from two weeks to a year with a minimum investment amount of $100,000. Nonfinancial corporations are the most common investors, while individuals rarely invest indirectly invest in NCDs through money market funds. NCDs offer some liquidity.

Repurchase agreements

Repurchase agreements usually amount for $10,000,000 or more with maturity terms between one day and six months and are agreements where one party sells securities to another party with a certain date and price to repurchase the securities specified in the terms of the agreement. Common participants in repurchase agreements are financial and nonfinancial institutions.

Federal Funds

The most common participants in the federal funds market, which allows depository institutions to lend funds from each other at the federal funds rate, are commercial banks. The transactions are usually completed by funds brokers that receive a commission for their service. Common maturity terms of these transactions are between one and seven days with amounts starting at $ 5 million.

Banker's acceptances

Banker's acceptances are slightly credit risky short-term (usually between 30 and 270 days) agreements between (most commonly) exporters and a bank with the bank accepting responsibility for future payment. For this risky agreement (from the bank's perspective) the bank is reimbursed the funds by the importer in addition to a fee.

Municipal Bonds

A municipal bond is a bond issued by the federal government to finance the difference between spending by the government and the revenues they receive. Municipal bonds have a credit risk of default; the level of risk can be measured by the bond rating issued by Standard and Poor's. The minimum amount for a municipal bond equals $5000. The majority of municipal bonds are callable; generally interest is paid out semiannually to investors and the interest gained from municipal bonds is tax-exempt. Secondary markets for municipal bonds can be either active or inactive. Finally, municipal bonds generally offer a lower yield than Treasury bonds.

Over-The-Counter Transactions

Over-The-Counter transactions are completed through a telecommunications network, which means that a stock is traded through a telecommunications network in a market without a trading floor. Over-the-Counter trades do not require the purchase of a seat for the trade, because they are not listed as organized exchanges.

Nicole Elmore
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2012年9月13日星期四

Must Know Differences Between Fixed Annuities and Certificate of Deposits

As a prudent investor, I am certain that you have found out all there is to know about certificate of deposits and fixed annuities. If you have been looking for more information on both these investment products, then you have come to the right place. Here, I am going to give you certain differences and similarities between both these products to help you understand them better and choose an investment plan that best suits you.

When you take both these investment plans in the light of taxation, a deferred annuity has a deferred tax plan. Any earning made through this particular investment is not taxable until the earned amount is withdrawn, giving you a better advantage over tax control and opportunity for better growth. Certificate of deposits on the other hand are very much taxable and the earning through such investment plans are taxed every single year. Depending upon how much your CD has earned and depending upon the tax bracket you come under, the returns on the investment plan can definitely be affected to a great extent. Since any annuity is taxed as an income of an individual, it would be best if you could make the withdrawal during retirement when the taxes are low or when there is a change in the current tax plan that could possibly be beneficial at that point of time.

As for the safety of investments is considered, both fixed annuities and certificate of deposits are equally safe and safer than all other investment plans available. It would be best for you to know that unlike a CD, fixed annuities are not backed by government institutions. Therefore, it would be best if you could invest in a company that has an A or a better rating with one of the renowned rating agencies. It would be best to invest in an insurance company that has a lesser return but a higher rating than take a risk with a lesser rating and higher returns. A certificate of deposit on the other hand is definitely more secure since it is backed by FDIC or the Federal Deposit Insurance Corporation. They has protected CD holders to an upper limit of two hundred and fifty thousand dollars each. If your bank fails and if it is unable to pay your deposits back, the FDIC will reimburse you to the mentioned amount.

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2012年9月11日星期二

10 Helpful Tips When Opening a Certificate of Deposit

Many people tend to look for a low-risk investment option for money, and hence turn to certificates of deposit (CD) in order to do so. If you would like such an investment, consider the following points so as to be fully aware of what you are getting into.

1. A CD is a type of deposit account that offers a higher rate of interest compared to a normal savings account.

2. CDs are covered by a federal deposit insurance up to $250,000.

3. When you purchase a CD for a fixed period of time, the bank pays you an interest periodically. You also have the option of collecting the interest accrued at the time of maturity of your CD.

4. Early cancellation of your CD has a penalty applied on it.

5. There are many deposit brokers in the market. These brokers will negotiate with the bank on a higher rate of interest and give you a less rate.

6. Contrary to earlier, CDs these days have been complicated with variable rates of interest which change depending on how long the tenure of the deposit is.

7. If you have a long term CD, the banks have a right to terminate the CD if the interest rates fall. However, if the interests rate rise, you will still get the lower rates.

8. When picking a CD, consider your financial goals and ensure that your choice meets your goals.

9. Understand potential pitfalls - these include the difference between the call period of a CD and its maturity date. Be clear with all terms and conditions on your CD.

10. Research any penalties and any other charges that might be applicable before hand so that you wont get rude shocks later.

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2012年9月10日星期一

March 2010 (Update) - Best Certificate of Deposit Rates

Okay, first, sorry that this has not become a monthly update yet. Good news is we have been so busy helping people I don't have much time to write. However, here we are with some commentary for the current best rates we can find. Also, have a few ideas on how to maximize your rates.

Outside of CD rates continuing to fall, not much has changed in the real world. The longer the Fed keeps rates low, the lower CD rates will fall. Once the Fed begins to signal higher rates, CD rates will rise. Its anybody's guess as to when that will be. Another pressure on the CD rates is the national rate cap that the FDIC has imposed.

The fed has continued to successfully sell our debt around the world. This has helped keep treasury yields and thus government backed bond yields low. Today the 2-year stands at 0.95%, the 5-year at 2.39%, and the 10-year 3.69%. This is quite a cliff we are over. higher rates now would short circuit a very weak housing sector and probably give us a double-dip recession. Low rates however give too much freedom for hedging and thus creating big bubbles that can burst.

Fed Funds are still between 0% and 0.25% For 1-year CD rates we saw an average decrease of about 0.35%. On 5-year CDs, the decrease has been around 0.25%. The economy is still very shaky. The recovery (if you can call it that) is likely to last years. The government is trying to stall foreclosures, but with unemployment near 10%, a lot of people just can't afford a payment no matter what kind of modification they get. I recently read a statistic that 70% of those that have received a modification are back in the red again. Commercial real estate and sovereign debt problems (Greece, Dubai) are the ones that are seen to be next crises.

Soon after the larger banks began paying back TARP funds they returned to paying huge bonuses. I'm all for paying paid well when you do well, but these bonuses aren't based on long-term value for the company or investor. That is where a serious disconnect is.

Okay, so for some rates. Alliant Credit Union continues to have "high" 1-year rates at 2.10% APY. Their closest bank competitor is a 1.75%. Pentagon has a 3Y at 3.00% and a 5Y at 3.50%. Their penalty for early withdrawal is 6-months of interest. This makes for an attractive play if you think rates will be considerably higher in 2-years. Bump up CDs can also be good. These are usually 2 - 5yr CDs with options to move the rates up as the bank moves the rates up.

For more Bank Certificates of Deposit come on by.

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Example of a Certificate of Deposit

If you're looking into smart, low-risk ways to make your money grow, you've probably already thought about choosing a certificate of deposit (CD). This option is popular because it can offer a high interest rate with a very dependable payout. But the CD option also involves very little know-how from the first-time investor; it's hands-off throughout its duration and it's flexible to meet many people's needs, whether you're a high roller or just a thrifty Average Joe. If you're considering this option, it may help you make up your mind to not only understand how the certificate of deposit works, but to also be given an example of what the terminology and arrangement mean. Find both below.

Overview of a Certificate of Deposit

A certificate of deposit is an arrangement between you and a financial institution whereby you commit a flat rate of money to them for a fixed amount of time. They commit to you an annual interest rate, possibly based on how much money you're putting forth, but more commonly based on how much time you're willing to commit it. Because the bank is able to move your money around while it's in the bank's hands, they stand to capitalize on your funds. For allowing them to do this, they're willing to offer you a higher interest rate than they would offer if you were just putting the money into a stagnant savings account that the bank cannot access. However, allowing the bank to move your money does not put it at a higher risk than if the money were in a savings account because the bank itself should be protected federally, guaranteeing all patrons the right to access not only their own money but the sum the bank promises. The only downside to a CD rather than a savings account is that you can't touch your money until it reaches the agreed-upon maturity date, when your contract is finalized or renewed.

Example of a Certificate of Deposit

Let's say that you have about $1,000 to invest; one of the many appeals of the CD investment strategy is that it doesn't have to be a gigantic sum to get started. Now that you know how much you have to play with, you have to think about how long you want your money to be tied up and out of your hands. You may find an arrangement where you can earn more money the longer you keep your money in your account. So let's say that you can either earn 2% over the course of five years or 2.5% over the course of ten years, with interest compounded annually (please note that these numbers are being used for demonstration's sake - and to make math easier - and they do not represent the market's current averages in any way). This means that you can walk away with $1,104.08 sooner or $1,220.08 if you have a decade to invest - more than double the earnings on the same base amount of money. In a savings account, you might earn 0.5% over any course of time because it's both lower to begin with and less negotiable purely based on timeframe. Looking for an even better demonstration of what your personal situation means? You can use a certificate of deposit calculator to play around with variables until you find an exact solution that appeals to your exact, specific income and financial obligations.

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Certificate of Deposit

Certificate of deposit or also know as CD is a time deposit, financial goods that are offered by credit unions, savings institutions and banks to the consumers. Certificate of deposits are virtually free of risk as they are similar to the savings account as they are insured. Howsoever they are bit different from the savings account as they are fixed for specific period of time (that can be from three months even five years i.e. user specific) and of fixed rate of interest. It is anticipated that CD is to be held by the customer until is matured and only then it can be with drawled from bank with the given rate of interest. They are also called a fixed deposit which is made in banks. This is a way of collecting money by the banks from its customers for the purpose of lending. This brings money in the market and it helps increase liquidity in the market which makes it an integral part of the market.

In this exchange of keeping the money in deposit section on an agreed term, banks pay us the interest but the question where do they get the money to pay interest, the answer is simple they collect the money from customers and lend this money as loans at higher interest rates to firms and people. Usually there are fixed rates in CD but banks also offer variable rate. Other than local banks CD are also offered by the independent sales person and also brokerage firms to the investors that are going for safer investments. These sales persons are called deposit brokers. Mainly these brokers offer higher interest rate on CD by assuring to get specific amount to the institution.

However early withdrawals i.e. before CD is matured as a rule are subjected to considerable penalty. These penalties make sure that the investor's best interest is not to withdraw its money until it is of utmost importance. Usually banks mail notice to the investor that its CD matures shortly and further directions are required. Notice mainly offers the principal amount along with the rate of interest or rolling it over i.e. depositing the total amount into another CD. Generally there is a given time after the CD has been matured that the CD holder can collect the cash without paying any penalty. The more the duration of the deposit, the more interest it fetches.

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Certificate of Deposit

2012年9月18日星期二

What Are the Advantages of CDs (Certificate of Deposit)?

Keeping Your Money Safe and Profitable Through Certificate of Deposit

2012年9月17日星期一

FDIC Creates a National Certificate of Deposit Rate

Top IRA Certificate of Deposit Rates - October 2009

2012年9月16日星期日

Types of Certificate of Deposits

2012年9月15日星期六

Comparing A Money Market and a Certificate of Deposit

Cash in Or Borrow From Your Certificate of Deposit to Get Quick Cash

Annuities - Equity-Linked Certificate Of Deposit - The Safer Low-Cost EIA Alternative

2012年9月14日星期五

Always Get the Insured Certificate of Deposit Rates (CD)

What Is An IRA Certificate Of Deposit And How To Use It In Your Retirement

Finance Basics: Money Market Funds: Treasury Bill, Commercial Paper, Certificate of Deposit

2012年9月13日星期四

Must Know Differences Between Fixed Annuities and Certificate of Deposits

2012年9月11日星期二

10 Helpful Tips When Opening a Certificate of Deposit

2012年9月10日星期一

March 2010 (Update) - Best Certificate of Deposit Rates

Example of a Certificate of Deposit

Certificate of Deposit

2012年9月9日星期日

HSBC Certificate of Deposit Rates - Tips to Invest

How to Get A Better Certificate Deposit Interest Rate

Should You Save Money With a Certificate of Deposit?

2012年9月8日星期六

Highest CD Rates 2010 - How to Find the Best Certificate of Deposit Rates?

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