What is a certificate of deposit?
A certificate of deposit, also known as a CD, is an investment instrument that provides mid to long-term stability. CDs are typically fixed rate, in other words, the investor and bank agree upon an interest rate at the opening of the account, and this rate stays constant until the CD matures. However, there are certificate of deposit arrangements in which consumers can choose to hike up the interest rate one time during the term of the investment. CDs have been considered ?secure? investments when compared to options like mutual funds, stocks, and private equity investments. The banking institution which supports your CD may charge you a significant penalty fee if you remove all or part of your monies before the certificate matures. That said, you may be able to garner some of the interest you earn as the CD grows, just bear in mind that the money you skim from your CD won’t be available to help your investment compound.
Many investors today are diversifying business undertakings. Other than getting into stock market trading, they venture into something that potentially gives back the capital with a considerable amount of interest. What is a Certificate of Deposit (CD) is an investment product that gives an investor the privilege to earn middle to high interest rates for a certain period of time that ranges from six months to 5 years or more. What is a Certificate of Deposit is often asked by those first-time investors and individuals who are not well-versed with financial trends. It’s a standard in CD investment that fixed rate interest is agreed between the investor and the CD-selling bank that is covered by the Federal Department of Insurance Corporation (FDIC) for a more secured investment. If you are partnering with a credit union, then it must be indemnified by the National Credit Union Administration (NCUA).
A certificate of deposit is a certificate issued by a financial institution confirming a particular deposit. A CD has a maturity date, a specified interest rate, and can be issued in any denomination with a maximum duration of 10 years. First Tennessee offers several certificates of deposit with various features and benefits designed to fit your savings needs.
