Certificate of Deposits or CDs are a good investment for short and long term savings. CDs are a useful source for saving money if you have a spare amount of money that you don’t want to use anytime soon. There are a few things that you should know about the certificates of deposit rates.

Here is what you should know about Certificate of Deposit rates:

Interest rates
It is important to know about the interest rates. The interest rate for a Certificate of Deposit is a fixed rate determined at the time of purchase.

Long term/Short term deposit
A Certificate of Deposit can be a short term or long term investment. There are penalties associated with cashing in a CD early so it is important to select the term that best fits your financial situation.

Analysis of the rates
The interest rate is as important as the term. Different banks and financial institutions offer different rates. Once you know the term you can select the highest yield interest rate available

Laddering
It is an important technique used building a CD portfolio. It is a simple way that is used to invest money in chunks so that not all funds are tied to one maturity date.

Terms and conditions
The terms and conditions that are a part of it are adaptable and they can be changed according to the bank policies. You will want to review the terms and conditions that apply to the CD prior to purchasing.

Delays:
There can be a certain delay in the withdrawal of the amount of interest or your investment. The bank has the right to delay them for a certain period of time.

A certificate of deposit rates is a good saving plan but one need to know a few important things. It is good to know how, when and where to invest. It is a less risky way of keeping your money safe.