The Ins and Outs of CDs

the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE the In's&&outsofCDspe (Certificates of Deposit) What do you mean, CDs? CDs - Certificates of Deposits Investments that are on fixed-income and given by financial institutions such as banks and lenders, which are insured by the FDIC up to $100,000 (or up to $250,000 for retirement accounts). How does that work? You take a fixed amount of money, and give that to the financial institution for a specified, or fixed, amount of time. The financial instution will then give you the principle (what you originally gave) plus a fixed amount of interest. When that specified time is over, you get the original principle and the interest gained over the life of the investment. However, you will be responsible for paying taxes the following year on any interest you earn. If you want to buy a CD, there is a decision as to which type of CD you want. Below are the different types of CDs for you to choose. TRADITIONAL BUMP-UP LIQUID ZERO-COUPON CALLABLE CD CD CD CDCD A traditional CD is one where you choose the amount that you will invest for a specified amount of time, or term, and a defined interest If interest payments are not for you, consider a In today's economy, inter- ests rates are very fluid. If you want to take advan- tage of those, then a bump-up CD is for you. During the course of your term, if interests rates rise and you want to take advantage of that, you can bump-up to that rate. However, because of this option, your initial inter- est rate will be lower than traditional CDs. One downside to CDs is that if you withdraw your money, you will be charged a pentalty. With a liquid CD you will not have to worry about that. However, your interest rate will be lower. There is a waiting period of 7 days after the money is in the CD before it can be withdrawn, and banks can set the Does interest rate risk not zero-coupon CD. You purchase the CD at a steep discount to par value (what you'll receive once make your skin crawl? Well, callable CD may be for you. With this CD the bank can contact to the term expires), Zero- coupon means zero inter- est payments. However, you will only receive your payment of interest when the term is over. you repurchase and reissue your CD when interest rates fall. There is upside though, you start off at a higher interest rate because of this option the bank has on yout CD. rate. because of this. an pentalty-free date for anytime after that. The UP's and DOWN's of investing in any CD (verses to savings, 401k's, stocks, money-market accounts, etc.) Because CDs are considered a very safe, low risk investment, the return on that investment is quite average at best. You won't have the option to make more money as with other investments that pose higher risks. A CD offers a higher interest rate than a savings account, and is still secured. It's a very safe investment, however, there is very little opportunity for you to rake in big bucks. As the market goes, so do CDs. They are dependent on the economy, so if they economy is going great, so are the CDs. If they economy is sluggish, well.. Unless you go with a liquid CD, there is a penalty for withdrawing your money before the term expires. The safety of this is that the financial institutions are FDIC insured for up to $100,000. You can sleep soundly by knowing you'll receive the cash when the term expires. Just as with any investment, nothing is guaranteed 100%. Even though CDs are low risk, they are still vulnerable to inflation, so do your research. The interest rate for a CD probably is higher than your banks savings account interest rate. Because everyone is different, there are multiple options that offer different options for different people. When purchasing a CD, you are allowing yourself to part with your money for a specificied amount of time, at least 6 months (the lowest interest rate) to as many as 3 years. So be prepared to be apart from it. CD Rates Available at Different Lenders ONLINE BANK CD RATE MIN. BALANCE $0 $2,500 $10 12-60 Months SALLIE MAE 1.5% to 3.00% 12 Months DISCOVER BANK 1.95% 6-48 Months HSBC DIRECT 1.0% to 1.70% 6-60 Months 1.52% to 3.10% $1,000 $0 AURORA BANK FSB ING DIRECT 0.75% to 1.25% $500 $1,000 $0 $1,500 FNBO DIRECT 1.00% to 2.51% 3-60 Months E-TRADE 0.84% to 2.99% ALLY BANK 0.75% to 3.39% EVERBANK 1.0% to 1.40% TRADITIONAL LENDERS CD RATE MIN. BALANCE 18-30 Months CHARLES SCHWAB 1.90% $0 $5,000 $1,000 12 Months BANK OF AMERICA 1.40% FIDELITY 0.75% PFhub TM Sources: thedigeratilife.com, bargaineering.com, howtodothings.com PERSONAL FINANCE