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Certificate of Deposit (CD) Account Reviews

Certificate of Deposits (CDs) are another great alternative when looking to save up funds or invest in retirement. A CD is basically a loan you make with a bank for certain amounts of time, when the bank gives you back your money with interest. A CD locks money in for a set period of time (generally between 30 days and 5 years) at a set interest rate, which is generally higher than a savings or money market account. At BankTruth.org we provide you with all of the up-to-date information you need when researching which CD is best able to suit your needs.

Why get a CD?

There are three great reasons why you should consider getting a CD at an online bank. First, the interest rate on a CD is much higher than on a savings or money market account, and thus you will make more money by getting a CD as opposed to the other two. Second, CDs offer flexible periods of time with which to invest money. It could be anywhere from 30 days to six months to five years and beyond. The interest rate on the CD will stay locked in, so if rates elsewhere start to fall you won't have to worry about it. This also leads into the third reason, in that it is a safe and conservative way to save money. As Ron Popeil famously states on his television infomercials, you can "set it and forget it!" You don't have to worry about whether interest rates may change or where the funds are going, because you will know exactly where they are and for how long.

CD vs MMA vs Savings

It is important not to mix up a CD from a savings account or money market account, so this section will describe their similarities and differences. As far as similarities, all offer a great alternative when it comes to saving money and investing for retirement. All of them are also FDIC insured, so you know that they are safe should anything happen to the online bank or what not. As far as differences, a CD has a locked in interest rate for a locked in amount of time. A money market and savings account do not have locked in rates or periods of time, and it is important to keep this into consideration. No withdraws are allowed early on CDs as well, as opposed to the other two accounts. If you do withdraw early expect to pay penalties regarding both interest and principal.

What to look for in a CD

There are four areas you should look for when it comes to researching CDs at BankTruth.org. First and most important is the interest rate offered. They can vary widely from bank to bank so make sure to review many banks before making a final decision. Second, look at the various time periods offer. Some may only offer shorter term CDs, while others may offer only longer term CDs. Know exactly what kind of time period is right for you before researching CDs at various online banks. Third, find out what the penalties are for early withdraw. Some online banks may be more severe than others, so it is important to find out in case an emergency were to come up and the funds were needed immediately. Lastly, check out other various features such as automatic roll-over and whether you can deposit the interest payments in another account.