Let us create a 3D eBook for you!
Let us create a 3d Digital eBook for you! DigyCat.com

Looking For a Safe Investment? Try a Certificate of Deposit


If you are looking for a safe investment and you have between $100 -$1,000 to invest, you should consider a certificate of deposit or CD. When purchased through a bank, CD's are federally insured up to $100,000.

When you invest in a certificate of deposit, you are lending your money to the bank for a set period of time at a fixed rate of interest. At the end of that time period, the bank pays you back your investment with the interest you've earned. The annual interest earned is reflected by the annual percentage yield or APY.

There are several details to consider before investing in a CD. First, find out when the CD will mature? Banks offer certificates of deposit with maturities ranging from 3-months to 10-years or more. Figure out how much to safely invest and how long you feel you can leave that money alone so that it earns interest. Also, make sure you get the maturity date in writing.

Second, you'll want to know the annual percentage rate (APR) you'll earn on your investment. Investing larger sums for longer terms usually earns the best interest. However, even a small investment can earn you higher interest than a traditional passbook savings account.

Next, find out how the interest is compounded - daily, monthly, or annually? Daily compounding is best because it earns you more interest. You can shop for the best CD rates at www.bankrate.com or check with your personal banker.

Shopping on the internet, I found rates for a $1,000 1-year CD in my local area ranging from 2.96 to 3.97 APR and a 3.00 to 4.05 APY respectively. So if I invested $1,000 at 2.96 APR, at the end of 12 months I'd get paid $1,030.00 by the bank (figures computed with interest compounded monthly). That same $1,000 invested at a rate of 3.97 APR would return $1040.43.

Interest rates are usually locked in for the term of the CD, although some banks allow you to take advantage of higher interest rates by converting your CD. This type of CD is called a "step up" CD. Generally, banks will only let you "step up" once during the term of the CD.

What happens if you withdraw your money before the certificate of deposit matures? Your bank will impose an early withdrawal penalty, which can vary depending upon the maturity date and the amount invested. It's important to invest only money you can truly afford to leave alone for the term of the CD.

As with any investment, make sure you understand all the terms, fees, and any penalties before you purchase.

Copyright 2005, http://www.yourfreecreditreportnow.com
Author: James H. Dimmitt

James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book "IDENTITY THEFT- How To Avoid Becoming the Next Victim!" and other money-saving bonuses by visiting http://www.yourfreecreditreportnow.com


MORE RESOURCES:

Investing - Google News

This RSS feed URL is deprecated

This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Retailers consider investing in online 'Costco for millennials' - New York Post


New York Post

Retailers consider investing in online 'Costco for millennials'
New York Post
General Mills and Bed Bath & Beyond are weighing investments in Boxed.com, The Post has learned. Big Apple-based Boxed, dubbed the online “Costco for millennials,” is suddenly among the hottest tech startups in the country because its network of ...

City school agency broke law, lost money by not investing - New York Post


New York Post

City school agency broke law, lost money by not investing
New York Post
The city's School Construction Authority stashed $104 million in a low-interest checking account for two years — losing out on hundreds of thousands of dollars by not investing the money elsewhere, as required by law, according to an audit released ...

Growing Pains: Why A Lot Of Chinese Aren't Investing Their Wealth This Year - Forbes


Forbes

Growing Pains: Why A Lot Of Chinese Aren't Investing Their Wealth This Year
Forbes
The reasons for this year's slower growth, though still enviable by world standards, point to trends that China will need to grapple with beyond 2018: Its citizens have money but are investing less in businesses and real estate. Investment, worth an ...

CVS Health Reminds Us That Investing Is 90% Half Common Sense - Seeking Alpha


Seeking Alpha

CVS Health Reminds Us That Investing Is 90% Half Common Sense
Seeking Alpha
If the speculation that Amazon is taking over the world is imminent, will the major airlines soon be ordering their new planes online with two-day free shipping as long as they have a Prime membership? In all seriousness, many of the Amazon competitive ...

and more »

Tim Cook: Apple investing billions in US thanks to tax cuts - Axios


Axios

Tim Cook: Apple investing billions in US thanks to tax cuts
Axios
Apple CEO Tim Cook told ABC on Wednesday that Apple will now be "paying $38 billion that we would not have paid" under the old tax system, but will be paying less over time, which is "one reason why we can... invest over $350 billion in the United ...
Apple lauded for its new multibillion-dollar investments. But were they already part of the plan? NBCNews.com

all 122 news articles »

Millennial Investors Want Perks and ESG Investing - Planadviser.com


Millennial Investors Want Perks and ESG Investing
Planadviser.com
The latest Spectrem Group report, “Millennial and Generation X Investors,” suggests these two generations are significantly more attuned to socially responsible investing than their older counterparts. In fact, survey results show more than half of ...

and more »

How to Pick Stock Investments - NerdWallet (blog)


How to Pick Stock Investments
NerdWallet (blog)
It's a dilemma first-time investors and grizzled veterans alike encounter. There are seemingly endless possibilities: In the U.S., there are more than 4,000 publicly traded stocks, 9,000-plus mutual funds and more than 2,000 exchange-traded funds, not ...

and more »

Stock market worst to first: 'Dogs of the World' strategy works - CNBC


CNBC

Stock market worst to first: 'Dogs of the World' strategy works
CNBC
I back-test how I would have done if I invested in a range of global dog strategies — the 10-worst, five-worst, three-worst or single-worst country) in every year. If you invested in the bottom five annual performers from the previous year — every ...

Google is investing in Indonesia-based Uber rival Go-Jek ... - TechCrunch


TechCrunch

Google is investing in Indonesia-based Uber rival Go-Jek ...
TechCrunch
Google is back investing in ride-hailing companies. The U.S. search firm and China's Meituan-Dianping are among the tech giants set to invest in Go-Jek, the Indonesia-based rival to Grab and Uber, a source with knowledge of discussions told TechCrunch ...
Google, Temasek investing in Indonesia's Go-Jek as ride-hailing rivalry deepens-sources Yahoo Finance

all 10 news articles »

LargeFriends.com - the best dating site for plus-sized singles!
SuccessfulMatchCentral.com - the best dating site for plus-sized singles!

PreLaunchX

MyIdeal Domain Is For Sale - $8,000 For Enquiries eMail Us

© www.MyIdeal.biz - 2012

home | site map | links