CDs: A minimum deposit investment that guarantees the same rate of return for specified investment length of time.

WHAT ARE CDs?

A minimum deposit investment that guarantees the same rate of interest for specified investment length of time.

TYPES OF CDs

There are two types of CDs:

• Small CDs These CDs contain less than $100,000 in deposited funds.
• Large CDs These CDs contain more than $100,000 in deposited funds.

WHERE TO PURCHASE

You can purchase CDs at most banking institutions, credit unions and some on-line banking and investment firms. For your deposit of funds into a bank you receive a certificate that explains the amount you deposited, the interest rate you’re to be paid and how long your funds must remain in the account. HINT: The longer funds are in a CD, the higher the interest rate paid to you will be.

WITHDRAWL FUNDS

With CDs you are not allowed to take funds out until a specified amount of time. With CD you choose, you’ll have to invest your funds for:

• 3 months
• 6 months
• 1 year
• 5 years

If you must withdraw your funds before the end of the specified amount of time, then you will have to pay penalties (the amounts depends on your account and banking institution).

INTEREST RATE

The longer funds are in a CD, the higher the interest rate paid to you will be. Another thing to know is that interest rates for CDs are generally fixed. So as interest rates fluctuate in the market, the CD’s interest rate will stay the same. The CD will usually pay compounded interest. What does this mean to you? This means that the interest you’ve already earned will earn interest as well.

FINDING A FINANCIAL ADVISOR

A financial advisor can ensure you’re saving enough to meet all your immediate and retirement needs. Find out what’s best for you and your retirement goals! Learn more about the different asset allocation types, explore the areas above and fill out our online form to find a certified financial advisor in your area.