Certificates of Deposit

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Certificate of Deposit accounts have long been a recommended way for clients to earn a considerable amount of interest on the money that they deposit. CD's, as these accounts are often nicknamed, are very useful for those that wish to start saving at an early age for college or another large expense.

The main advantage of CD's is that they often offer higher interest rates than that of an average savings account. The down side is that the client agrees to leave all of the funds in that account until the agreed date comes around. CD's usually cannot be withdrawn from for a period of several years, at the least. The purpose of the CD is to allow the bank time to invest the money and obtain a substantial return to the client.

In the past, CD's have been a good way for parents to invest money to allow their children some income while attending college. The very best thing about a CD is that it carries virtually no risk, since all accounts have been insured by the FDIC since President Franklin D. Roosevelt implemented that organization in the 1930's. While the 1929 stock market crash and the following Great Depression may have been very difficult times, they also taught the citizens of the United States a few things that should not be forgotten. One of the most positive assets of this learning was the development of the Federal Deposit Insurance Corporation. Since this organization started operations, many Americans have been spared of tragic losses through its existence.

  • Negotiable interest-bearing certificates by which a bank promises to repay money deposited with it for a specific time period at a specified interest rate. A “time deposit” in a bank, maturing on a specific date, and traditionally evidenced by a certificate. http://www.aspa.org/resources/res_news_glossary.htm
  • A document written by a bank or other financial institution that is evidence of a deposit, with the issuer's promise to return the deposit plus earnings at a specified interest rate within a specified time period. http://www.smartermi.com/welcome/glossary_c.html
  • A negotiable certificate issued by a commercial bank as evidence of a deposit with that bank which states the maturity value, maturity rate and interest rate payable. CDs vary in size with maturities ranging from a few weeks to several years. ... http://www.mondovisione.com/index.cfm
  • The certificate issued to a depositor who opens a certificate account. The certificate is the written document issued by the financial institution as evidence of a deposit. ... http://https://www.midfirst.com/library1.asp
  • An interest-bearing negotiable certificate representing a time deposit of fixed maturity issued by a commercial bank which is traded on a yield basis with interest computed for the actual number of days held on the basis of a 360-day year. http://www.indy.gov/eGov/City/BondBank/Pages/glossary.aspx