Is a Certificate of Deposit Right for You?

Certificate of Deposit

Have you ever considered opening a certificate of deposit (CD) as part of your financial strategy? Do you know the difference between a CD and a savings account? We’ll give you the 101 on CDs, from what they are to how to find the best rates and open yours today.

What is a CD?
A CD is a type of deposit account that typically offers a higher rate of interest than a traditional savings account. CDs are purchased from a bank and by doing so you agree to keep your money with a bank for a predetermined amount of time. In return the bank will pay you back with interest earned and that earned interest is guaranteed during the CD’s term. Plus, you cannot lose your principal (the money you used to purchase the CD).

How are CDs different than other types of savings accounts?
CDs typically pay higher interest than traditional savings accounts and money market accounts. Plus, CDs can be purchased at different terms, from three months to five years. Some CDs can be purchased for as little as $250. The main differences between a CD and other savings accounts are the penalties that CDs carry for early withdrawal. More on that below.

Why is a CD right for you?
CDs are commonly viewed as safe long-term investments. They’re FDIC-insured up to $250,000 and provide a viable option for getting your money to work harder for you without the risk. CDs come standard with financial self-discipline as well. Savings and money market accounts give you instant access to your funds, meaning dipping into your savings will come at no monetary cost. CDs on the other hand carry a hefty penalty if you withdraw your funds before the CD’s maturity date.

How can you find the best rates?
Research is key when looking for a great CD rate. Make a habit of visiting
E-LOAN’s Online Savings & CD Interest Rates page for the latest rates and APYs. Determine how much money you want to invest and for how long. It’s important to note that like most investments, there are some risks involved when purchasing a CD. If rates go up during your CD’s term, you may lose potentially larger interest gains.

Open your CD today with E-LOAN
Lock in a great rate with a CD and start saving today. Opening your account online will take just a few minutes. Get started here.

All deposit products offered through E-LOAN, Inc. (E-LOAN) will be opened through Banco Popular North America (BPNA), a FDIC-member institution and a New York state chartered bank insured by the FDIC that is the direct parent company of E-LOAN (i.e. E-LOAN is a wholly-owned subsidiary of BPNA). Processing services are provided by BPNA. All deposits with BPNA are insured for the maximum amount allowed by law, and all balances on deposit with BPNA (whether directly or through E-LOAN) would be combined for purposes of determining FDIC coverage eligibility. Beginning January 1, 2013, all of a depositor’s accounts at an insured depository institution, including all non-interest bearing transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance amount ($250,000), for each deposit insurance ownership category. For more information about FDIC insurance coverage of non-interest-bearing transaction accounts, visit
Please consult with your attorney, financial consultant/planner, accountant, and/or tax advisor for advice concerning your particular circumstances. The information contained herein is for general informational and educational purposes only and should not be construed as professional, tax, financial or legal advice or a legal opinion on specific facts or circumstances. The information or opinions contained herein should not be construed by any consumer and/or prospective client as an offer to sell or the solicitation of an offer to buy any particular product or service.

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