Introduction: A certificate of deposit (CD) is a time deposit account that allows savers to earn interest by depositing their cash for a specific period. CDs have gained popularity in the United States since the 1960s, providing a safe and profitable method for saving money. In this comprehensive guide, we will explore the features, benefits, and considerations of CDs, as well as provide tips on finding the best CD rates and maximizing your savings.
What is a Certificate of Deposit (CD)? A certificate of deposit (CD) is a financial product offered by banks and credit unions. It is a fixed-term deposit where individuals deposit a specific amount of money for a predetermined period, typically ranging from a few months to several years. In return, the bank agrees to pay interest at a specified rate.
Safety and Security CDs are considered one of the safest investment options available. They are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per bank. This insurance provides a guarantee that even if the bank fails, the depositor's principal investment will be protected.