While you will be able to legally and physically access the money, you will face penalties for doing so before maturity. The risk of not being able to access your money until maturity is a real consideration for anyone evaluating CDs as a savings option. They might have minimum balance requirements too – none of which you will find with most CDs. No Maintenance Fees: savings accounts will typically have monthly or annual fees, maybe both.Interest rates for CDs are typically fixed. CDs held for five years currently have rates of 3ish%, while savings held for the same time are more like 1-2ish%. A Higher Interest Rate: the main reason most people look to CDs over savings accounts, is to get a better rate of return over time.It is not unusual to see terms of varied durations, and typically, the longer you wait for maturity, the more money accrues with better rates. A Fixed Term: anywhere from a few days to 20 years, most CD terms fall between 6 months and 5 years.While sharing some traits with a high-yield savings account, the differences are what make CDs more effective as investment products. Each are insured by the federal government. They are offered by banks, while credit unions offer what is called a share certificate that is basically structured and will act in the same way as a CD. The main risk is not accessing your money freely while the CD is maturing. You’d have to leave your money in the account until the maturity date and be rewarded with a nice return. Understanding a CD is easy: they are a type of savings account, with a fixed interest rate and a set maturity date. This article will help you understand more about them, and how CDs can become a strategic part of your personal financial portfolio. While in many ways, it is similar to a savings account, there are benefits and risks to consider with a CD. One option that many will consider, is a certificate of deposit, or CD over a savings account. These people come to realize it is not always the amount of money that you have to save or invest, it is often how you choose to do it that matters. For many people, there are good times and rougher ones, so they try their best to save wisely, and always stay financially prepared.

Saving money is a luxury that is not always available to everyone. Inflation-adjusted future value of savings: Entry Descriptionįuture value (untaxed, not inflation adjusted):

Use this calculator to quickly figure the future value of a CD investment along with the effective APR you earned.

Calculate interest rate on cd