Certificates Of Deposit: Safety And More!
Most investors consider a CD to be a safe, conservative place to hold assets. The assets don't just sit there, though. They earn interest in return. Traditional CDs typically yield returns greater than the rates offered by other insured investments, such as checking and savings accounts. Rates vary from CD to CD, but they are near the current rate of inflation, in general.
When comparing the interest rates of various CDs, it is important to understand the difference between annual percentage yield (APY) and annual percentage rate (
Compounding involves the timing of interest calculation (or payment). A CD that pays interest only once a year will yield (in a year) only the exact amount of interest paid. When interest is paid several times a year, the yield total is the sum of the interest from each payment. Because the interest paid during the year earns interest in the account just as the original deposit does, compounded yield is greater than the yield for a onceayear calculation.
For example, if Yuko purchases a oneyear, $1,000 CD that pays 5% semiannually, she will receive an interest payment of $25 after the first six months ($1,000 x 5% x .5 year). The $25 payment begins earning interest of its own, which over the next six months amounts to $0.625 ($25 x 5% x .5 year). As a result, the yield is actually 5.06%, instead of 5% ,for a CD that pays 5% only once a year. The .06 may not seem like much at first, but compounding adds up as both the principal and interest continue to earn interest over time.
While traditional CDs are popular with investors, CDs are also available in a variety of configurations, offering a range of features and investment strategies. Read on to learn about the various models of this conservative place to stash your cash.

ZeroCoupon Certificate Of Deposit (CD)
A certificate of deposit (CD) that is purchased at a largely ... 
Certificate Of Deposit  CD
A savings certificate entitling the bearer to receive interest. ... 
Bull CD
A certificate of deposit whose interest rate fluctuates in direct ... 
Bear CD
A certificate of deposit whose interest rate fluctuates in inverse ... 
IndexLinked Certificate Of Deposit
A certificate of deposit (CD) with a return based on a specific ... 
Promotional CD rate (Bonus CD rate)
A limitedtime offer of a higher rate of return on a certificate ...

What is considered a good interest rate for a certificate of deposit (CD)?
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How safe an investment is a certificate of deposit?
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How are yields taxed on a certificate of deposit (CD)?
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What are the typical durations for a certificate of deposit?
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Other than my savings account, what other types of holdings compound my interest?
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What is the difference between APR and APY?
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