Understanding the Financial Risks of Certificates of Deposit (CDs)

What You Need to Know About CDs

Certificates of Deposit (CDs) often seem attractive due to their perceived safety. However, they might be costing you more than you realize. Here are the key points:

• Low Returns: CDs generally offer lower returns than other investment vehicles.
• Opportunity Cost: Money locked in CDs could yield higher returns elsewhere.
• Inflation Impact: Interest earned on CDs may not keep pace with inflation, leading to reduced purchasing power.

Conclusion

Before investing in CDs, consider the long-term financial implications. While they seem safe, the potential for significant lost earnings can outweigh their benefits.