Let’s talk about CDs. And no, not the musical kind. A certificate of deposit (CD) is a deposit account that runs for a fixed period of time, typically anywhere from three months to several years. CDs have a fixed rate of return. The interest collected on a CD account is guaranteed, and it continues to compound until the term is up. This makes it appealing as a low-risk investment opportunity. There are many positive benefits to opening a CD account to grow your savings. Here are just a few.

CDs are a safe and low-risk investment.

CDs have a fixed rate of return that is not dependent on the ever-changing economy. While the stock market may rise and crash (and your money with it), CDs ensure a guaranteed amount of interest back, based on how much you put in and the annual percentage yield (APY). 

Additionally, the FDIC ensures CDs up to the maximum amount regulated by law, meaning that if your financial institution failed, you would still be guaranteed your money back. Before opening a CD account, confirm with your financial institution that they are FDIC ensured.

CDs are dependable.

With a CD account, you may have a fixed rate for a fixed period of time. With a variable or adjustable CD rate, the rate of return may grow, for instance, from 4.05% APY to 4.25% APY. Either way, when the term is up, you will have compounded a certain amount of interest, coming out with more than you put in.

CDs have different terms to choose from.

CDs have fixed terms to choose from. Some are three months, while others are five years. This allows flexibility to choose a term that fits your financial and savings goals. For instance, if you want to go on vacation in three months, you can park your vacation fund in a CD and allow it to grow some interest to use towards your trip. If you are saving for a down payment on a house, you may want a CD with a five-year term.

Poppy Bank offers among the highest CD rates around. For more information, visit Personal Banking or contact a representative at (888) 636-9994.