{"id":3251,"date":"2011-04-23T11:30:54","date_gmt":"2011-04-23T11:30:54","guid":{"rendered":"https:\/\/maysfinancial.local\/?p=3251"},"modified":"2017-02-26T02:01:55","modified_gmt":"2017-02-26T02:01:55","slug":"cd-certificate-deposit","status":"publish","type":"post","link":"https:\/\/maysfinancial.local\/articles\/cd-certificate-deposit\/","title":{"rendered":"What is a CD (Certificate of Deposit)?"},"content":{"rendered":"<p>A CD, or Certificate of Deposit, is a common <strong>fixed-income investment offered by banks and credit unions<\/strong>. CDs are more often used for short-term savings than long-term investing.<strong> <\/strong><\/p>\n<p><strong>CD&#8217;s typically (but not always) have the following characteristics:<\/strong><\/p>\n<ul>\n<li>Fixed interest rate<\/li>\n<\/ul>\n<ul>\n<li>Fixed term between one month and seven years<\/li>\n<\/ul>\n<ul>\n<li>FDIC\/NCUA insured up to $250,000<\/li>\n<\/ul>\n<ul>\n<li>Higher interest rate with higher principal<\/li>\n<\/ul>\n<ul>\n<li>Higher interest rate for longer term<\/li>\n<\/ul>\n<ul>\n<li>Higher interest rate from smaller banks\/institutions<\/li>\n<\/ul>\n<p><strong>Advantages<\/strong><\/p>\n<ul>\n<li>Typically offer higher rates than savings and money market accounts<\/li>\n<\/ul>\n<ul>\n<li>Choices in term that best fits your time horizon<\/li>\n<\/ul>\n<ul>\n<li>Can be laddered (explained below)<\/li>\n<\/ul>\n<ul>\n<li>More flexible than bonds<\/li>\n<li>Many types of CD to fit your needs (traditional, liquid, zero-coupon, bump-up, high-yield, etc.)<\/li>\n<\/ul>\n<p><strong>Disadvantages<\/strong><\/p>\n<ul>\n<li>Penalty for early withdrawal (before maturity)<\/li>\n<\/ul>\n<ul>\n<li>Not as liquid as savings and money market accounts<\/li>\n<\/ul>\n<ul>\n<li>The longer your term, the better off you might be with savings bonds<\/li>\n<\/ul>\n<p><strong>Exceptions<\/strong><\/p>\n<ul>\n<li>Not all banks and credit unions are FDIC\/NCUA insured, usually offering higher rates for more risk<\/li>\n<li>Preceding a recession we can get something called an inverted yield curve, where long-term rates and lower than short-term rates for instruments of the same quality.\u00a0 This comes from higher demand of long-term rates in anticipation of lower rates.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>A CD, or Certificate of Deposit, is a common fixed-income investment offered by banks and credit unions. CDs are more often used for short-term savings than long-term investing. CD&#8217;s typically (but not always) have the following characteristics: Fixed interest rate Fixed term between one month and seven years FDIC\/NCUA insured up to $250,000 Higher interest [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[2,9],"tags":[43,65,74,122],"_links":{"self":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts\/3251"}],"collection":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/comments?post=3251"}],"version-history":[{"count":0,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/posts\/3251\/revisions"}],"wp:attachment":[{"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/media?parent=3251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/categories?post=3251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/maysfinancial.local\/wp-json\/wp\/v2\/tags?post=3251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}