“Opening a certificate of deposit (CD) can be a low-risk way to save for short- and long-term goals, whether it’s a new set of wheels in your near future or a child’s education that’s still several years out.”
Discovery recently interviewed POWWOW for an article on a long time favorite investment – certificates of deposit. CDs have in large part evolved from a safe investment option to nothing more than a cash reserve vehicle bearing minimal interest. I often suggest utilizing an online money market account, which often provide more flexibility and interest, making them the better choice.
However, if you’re a fan of CDs, what are some the benefits?
- They can establish or solidify a relationship with your local bank.
- The penalty for early withdrawal may prevent you from overspending if you’re trying to stick to a budget.
- They are a safe reserve for surplus cash that provides more interest than a basic checking or savings account.