How do CDs work?
A certificate of deposit is a low-risk time deposit offering an easy and secure way to stash savings. In return for higher interest rates, you commit to leaving your money in the account until its maturity date. Here are some of the benefits of how certificates of deposits work:
- Security. If you’re someone looking for a safe investment, CDs may be the route to go. The Federal Deposit Insurance Corporation (FDIC) insures CDs up to the maximum amount allowed by law, minimizing risk and giving peace of mind to borrowers.
- Increased savings . Certificates of deposit are designed to maximize savings, regardless of what the market does, allowing your money to grow predictably.
- Flexibility. The amounts and terms that accompany a CD are completely flexible—meaning that you can easily opt for shorter terms depending on how long you’d like to tie up your money.
A certificate of deposit is one of the most secure investments available, while also offering fixed rates, convenience and flexibility.