How Do You Buy A CD (Certificate Of Deposit)?
Congratulations! If you are reading this article, you have saved money, an awesome feat, and are now ready to invest it. You are considering investing in a CD (Certificate of Deposit). You can’t help but wonder – what is a CD, and what are the pros and cons of investing in a CD? What types of CDs are out there and which CD should you buy? • What are CDs? CDs are fixed-income investments issued by banks, and insured by the FDIC up to $100,000 ($250,000 on retirement accounts). Here’s how it works: You give the bank a fixed amount of money for a term (that’s a predetermined amount of time). The bank gives you the principal, plus a fixed amount of interest. When the term expires, you receive your principal and accumulated interest. • How to buy CDs. Once you decide to buy a CD, decide on how you want to buy a CD. CDs can be purchased through either a bank or brokerage firm. Some banks have regulations that require you to physically come in to open a CD account. Other banks allow you to op
