10 Important Things to Consider Before Investing in CDs
Important Facts About Certificates of Deposit (CDs)
CDs can be a great way to lock in an interest rate on your savings. Keep reading for important facts about CDs.
1. Penalty for Early Withdrawals
If you open a CD, you may face penalties for early withdrawals, which can impact your earnings. Make sure to understand the withdrawal terms before investing.
2. Special CDs
Some banks offer non-standard CDs like no-penalty or step-up CDs, providing unique benefits for investors. Consider these options based on your financial needs.
3. Consider All Factors
APY is important, but also evaluate banking convenience, interest compounding frequency, and account management ease when choosing a CD.
- Minimum Deposit Requirements
- Standard and Non-Standard Term Lengths
- Interest Withdrawal Options
- FDIC Insurance Coverage
- Automatic Renewal and Tax Implications
- CDs within IRAs
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.