Savings Account vs CD You’re sitting on some cash and you’re wondering whether to put it in a CD or savings account. Given the current rate environment, there are some advantages and disadvantages to each option. Should I put my money in a certificates of deposit? Before you decide on a savings or CD, you’re [...]
Brokerage CDs A brokerage CD is simply a CD that is being offered by a brokerage. These CDs are are still issued by the same banks, and you might be able to get higher rates here because there’s a larger set of available banks. You can trade brokerage CDs on the secondary market, which does [...]
Zero Coupon CDs Zero-coupon CDs are like zero-coupon bonds. What happens is you buy a CD at a deep discount to the par value of the CD. You’ll usually get a higher interest rate with these CDs, but you won’t get any interest each month, it all gets paid out in the end. For example, [...]
Liquid CDs These CDs allow you to withdraw money without being penalized before the term is over. You usually have to maintain a minimum in the CD, and many times the number of withdrawals is limited. The rates on liquid CDs are usually higher than savings or money market rates, but lower than traditional CDs. [...]
Bump Up CDs Bump-up CDs are ideal if rates are increasing. These CDs allow you to “bump up” your rate sometime throughout the term of the CD. You can usually only do this once, and the rate only applies to the remainder of the term. The drawback to this CD is that the starting rate [...]
Traditional CDs These CDs are the most common. They typically have minimum deposits of anywhere from 1,000 to 10,000. In the recent down economy, some banks have droped minimum deposit requirements to $1 or even $0, but it doesn’t really make sense to deposit $1 in a CD, as you can’t add to it later. [...]