When it comes to investing your money, there are plenty of options available for you to choose. It can be quite confusing to decide which type of investment will suit you the best and the method to do it. When thinking about Retirements, there are many more generalized ways to invest money through banks or other special ways where you can save some money for your future. Keep in mind that there are many different types of account and each different account will have its own interest rate and other factors which you should take into consideration before thinking about investments.
So what is a CD?
A CD (Certificate of Deposit) is actually a promissory note from any trusted bank that you will be able to return the full amount plus interest upon the maturation of your CD. CD’s are one of the best methods of investment when you are looking to save money for your retirement. Keep in mind that CD’s aren’t an actual account in your bank and it is completely different from others. You will be paying a certain amount of money at regular intervals for a fixed period of time. There are many more factors that come into the scenario when thinking about CD’s. Therefore, it is very important for you to learn about all the advantages and disadvantages about a particular investment program when it comes to investing your hard earned money. One can easily find out the benefits of a CD’s and what to look for by visiting websites like – http://www.cdratesprophet.com.
What are the Benefits of having a CD?
Just read out all the points mentioned below and you will be able to make out why you should be investing in a CD.
1) More Interest
The Interest rates on regular savings accounts are extremely low when we compare it with a CD. Even though the interest rates on CD hugely vary according to the stock market’s performance, they normally have high rates. The main reason for high rates on CD’s is because the bank knows exactly when you will withdraw your money and they can lend it to others as a loan on good interest rates. However, as in the case of regular savings account the bank doesn’t know the time of withdrawal and hence they lose good sum of money, ultimately resulting in low interest rates.
2) No early withdrawals
As said above, you cannot withdraw your CD before the maturation of your copy and this can seriously be an advantage or disadvantage depending on your financial condition or the type of person you are. For most people, not paying a penalty for withdrawing money can be dangerous as they spend up all the money they have it in their savings account just because they don’t need to pay a penalty. And if you are a kind of person mentioned above, CD’s will be the best investment for you as you can’t withdraw them until and unless you are in a true need.
3) Insured by FDIC
One of the greatest advantages of investing in a CD, is that it is protected by a sum of $250,000. If anything goes wrong with the bank or retirement plans are all of a sudden closed down; you will still have your CD covered up and you can get back all the money you invested on it.
Deciding on investments is really a hard job but you can easily go with the right option if you use websites like cdratesprophet.com. The website gives you all the information about CD’s and also lists down all the different options available for you to choose from.