If you’re looking for a way to save money while earning a return at the same time, a Certificate of Deposit (CD) might be the right choice for you. CDs are a savings account with an agreement where the holder will not withdraw their deposit for a given period of time. They offer many different benefits to help improve your financial security. Keep reading for just four of the benefits that CDs offer.
It’s a safe investment
One advantage of CDs is that they are a safe investment choice. CDs deposited at credit unions are insured by the National Credit Union Administration. This means that you don’t run the risk of losing any of your deposit, unlike other investment options, as long as you do not withdraw your money before the term ends. If you’re looking for a secure way to make an investment, a CD is a logical choice.
Offers a predictable return
Much like how a CD is a safe investment, it also offers a predictable return. Many CDs offer a fixed interest rate, so you’ll know exactly what you will earn by the end of the term, helping you to plan for what your finances will look like. Even if the market’s interest rate drops, a CD with a fixed interest rate maintains the same. You also won’t have to worry about losing any of your deposit if the economy dips over the course of the term.
Yields a greater return
One reason why many people chose to use CDs is that they offer a greater return than traditional savings accounts. Since a CD holder is unable to withdraw their deposit before the term ends without paying a penalty, banks and credit unions provide higher interest rates in return. Depending on the rate, CDs could offer even double the return than you would have received with a savings account.
Good for long-term savings
A CD is a perfect way to safely set aside long-term savings, while also growing what you have. If you want to save but struggle with the temptation of treating your savings like an ATM, a CD is a solution. Since you can’t touch your CD deposit without facing a penalty, it’s a great place to set aside and grow your long-term savings. For example, if you’re saving for a new home, a CD account prevents you from withdrawing and effectively grows your savings at the same time.
Are you ready to get started with a CD? CTFCU is currently offering CDs for a rate of 2.49% and terms at 9 months with a minimum deposit of $500. The deposit must be new money from outside of CTFCU. Visit our CD promotion page or contact us to get started today.