Certificates of Deposit
Investors have long valued Certificates of Deposits (CDs) as a low-risk savings tool. Most types of CDs are straightforward; the more you deposit and the longer the term, the higher the interest rate and return. In addition, many come with insurance from the FDIC.
In today’s investment environment, historically low interest rates have made CDs much less attractive. If you need to withdraw your funds early, banks can charge stiff penalties. With the Federal Reserve committed to keeping interest rates low for the near future, what is an investor looking for safety to do? There are several strategies that can help you leverage CDs more effectively to make them a more worthwhile investment option.
- Select CDs with shorter terms — When selecting shorter terms, you may have to sacrifice higher yields. However, should interest rates go up, you would be able to avoid getting stuck with underperforming investments and reallocate according to the ri...
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