Certificates Of Deposit: Conclusion
  1. Certificates Of Deposit: Introduction
  2. Certificates Of Deposit: Safety And More!
  3. Certificates Of Deposit: The Basic Model
  4. Certificates Of Deposit: Bells And Whistles (Part I)
  5. Certificates Of Deposit: Bells And Whistles (Part 2)
  6. Certificates Of Deposit: Maturity And Strategies
  7. Certificates Of Deposit: Details To Consider
  8. Certificates Of Deposit: Conclusion

Certificates Of Deposit: Conclusion

Let's recap what we've learned in this tutorial:

  • Safety is a hallmark of the traditional certificate of deposit (CD) sold by a bank or credit union.
  • Investors seeking a low-risk investment expect that many CDs, when held to maturity, will return the full amount of the original investment, even if the institution issuing the CD collapses.
  • A federally-insured bank CD has the backing of the Federal Deposit Insurance Corporation (FDIC), and CDs at credit unions are often guaranteed by the National Credit Union Administration (NCUA).
  • 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.
  • While traditional CDs are popular with investors, CDs are also available in a variety of configurations offering a range of features and investment strategies.
  • The basic elements include the amount of deposit, the rate of interest (or return), the frequency of calculating interest, and the time frame (or term) marking the duration of the account.
  • In exchange for not withdrawing the investment or earnings during the term of a basic CD, the investor receives a fixed rate of interest – an interest rate that does not change for the entire period.
  • Sometimes, a minimum deposit amount is required, with larger deposits paying higher interest rates.
  • Penalty fees usually keep investors from withdrawing money from the account before the agreed-upon date.
  • Building on the basic model are CDs with many features.
  • Add-on CDs, bear CDs, brokered CDs, bull CDs, bump-up CDs, callable CDs and fixed-rate CDs are some of the options.
  • Other options include index-linked CDs, jumbo CDs, liquid CDs, uninsured CDs, variable-rate CDs, Yankee CDs and zero-coupon CDs.
  • The strategy an investor uses in choosing a particular CD from all of the options has to do with how the money in the CD will be used and what place it has in the investor's overall portfolio.
  • CDs can be used for short-term storage, long-term storage, income generation, conservative growth, speculation, hedging and more.
  • Examining the terms and conditions of a potential CD is key to selecting the best investment.
  • Investors can locate the right CD for their needs by taking all of the details into consideration.



  1. Certificates Of Deposit: Introduction
  2. Certificates Of Deposit: Safety And More!
  3. Certificates Of Deposit: The Basic Model
  4. Certificates Of Deposit: Bells And Whistles (Part I)
  5. Certificates Of Deposit: Bells And Whistles (Part 2)
  6. Certificates Of Deposit: Maturity And Strategies
  7. Certificates Of Deposit: Details To Consider
  8. Certificates Of Deposit: Conclusion
RELATED TERMS
  1. Fixed-Rate Certificate of Deposit

    A certificate of deposit (CD) which has a set interest rate to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  3. Promotional CD rate (Bonus CD rate)

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  4. Brokered Certificate Of Deposit

    A certificate of deposit (CD) that is purchased through a brokerage ...
  5. Index-Linked Certificate Of Deposit

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  6. CD Ladder

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RELATED FAQS
  1. What is considered a good interest rate for a certificate of deposit (CD)?

    Explore the various options available with certificates of deposit and discover how to find the most lucrative rates for ... Read Answer >>
  2. How safe an investment is a certificate of deposit?

    Discover certificates of deposit, their basic makeup and numerous variations, and understand why they are some of the safest ... Read Answer >>
  3. Are certificates of deposit a kind of bond?

    There is a fair amount of overlap between certificates of deposit (CDs) and bonds; they are both fixed-income securities, ... Read Answer >>
  4. Besides a savings account, where is the safest place to keep my money?

    Savings accounts are safe because investors' deposits are guaranteed by the Federal Deposit Insurance Corporation (FDIC) ... Read Answer >>
  5. What is the safest investment?

    Learn about some of the safest investment types. Find out which investment categories offer the best protection on your principal ... Read Answer >>
  6. Why do longer term CDs pay a higher rate than the short-term CDs?

    To address this question, let's employ the concept of distance. In the city, a short taxi ride from your hotel to a convention ... Read Answer >>

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