As the Federal Open Market Committee (FOMC) continues to lower the Fed Funds rates – keeping the rates hovering between 0.00 percent and 0.25 percent – the interest rates on certificates of deposit continue to decline too. Some investors remember a time when a 1-year certificate of deposit could earn them anywhere from 2.25 percent to 2.40 percent. They may also remember when returns dropped to 2 percent and then again to 1.5 percent. Some financial experts say there is a solution to the challenge with certificates of deposit, which include certificates of deposit with bump-up and step-up options and investing in longer-term certificates of deposit with low early withdrawal penalty fees.
The Strategy
The strategy is relatively simple. Inv
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Certificates Deposit, Deposit
Whether you have extra money tucked into a savings account, checking account, or its still in the form of a check or cash, you may be considering depositing this money into certificates of deposit. For many, certificates of deposit offer an investment that makes your money work harder for you. As is the case with any type of investment, make sure you take the Certificates of Deposit 101 course to gain a full understanding of certificates of deposit before you put your hard-earned money into one (or numerous ones).
Certificates of Deposit: Savings Tool
The primary purpose of certificates of deposit is to save money.
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Certificates Deposit, Deposit
Bank rates may be out of date. Please check bank websites for current rates.
US Bank has some competitive online certificate of deposits that are nationally available. Their CDs require a minimum deposit of $1000 and you can apply online instantly. The current CD rates (as of 12/23/2009) are as follows:
- 23 month CD – 1.75% APY
- 42 month CD – 2.00% APY
- 59 month CD – 3.00% APY
Interest is paid annually and at maturity. Annual Percentage Yield (APY) assumes principal and interest remain on deposit for the term of the certificate. All interest payments for the advertised APY will be made at the end of the term or annually, whichever occurs first. Penal
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Certificates Deposit, Deposit