- Will you need the money anytime soon, less than 6 months? If so do not purchase a CD, the money might as well be left in your bank account.
- Interest rates: If interest rates are rising a shorter-term CD may be the best idea to get more money. If rates are falling a longer-term CD may earn you more money, since your cd will be at a higher rate than the rest of the market.
- Review interest rates at various banks, just don’t lock into your own bank, each bank has slightly different rates so choose the bank that has the best rate.
Let’s talk about Certificate of Deposit also known as “CDs”. They are low-risk investments to put your cash in if you have no immediate plans for it, example would be for future house or car down payment. CDs are ideal because they offer low risk but also provide a larger interest rate than you would receive in your checking/savings account at your bank. So what are some things to consider before buying a CD? Let’s discuss them.