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Certificate Of Deposit Interest

A certificate of deposit, or cd, is a method for saving money. you open your cd with a certain dollar amount and you agree to leave your money in the cd for the agreed upon time, the term. The certificate of deposit interest you earn will be locked in for the term of your cd, no matter what the markets do. 

Though, in general, the certificate of deposit interest rate is not very high you still get a higher rate than a traditional savings account in most cases. 

A cd is also more liquid than other, more aggressive and higher paying types of investments.  A cd is as safe as other savings accounts yet usually yields a much higher interest rate. 

It is more liquid than other forms of investments, but less liquid than a regular passbook savings account. 

With so many pros and cons it is important for you to learn as much as you can about all the type of possible savings plans before you make your final decision. 

One of the easiest ways to compare rates is to head online. There are sites that will compile the most recent interest rates for various financial vehicles and from various financial institutions. This "one stop shop" for interest rates can save a lot of time. 

One such site is bankrate.com. This site will have information on many financial institutions, though not all of them. You can also check out the website for your own local financial institutions for their current rates. 

With a cd the interest rate can also go higher if you have a large deposit and / or you get a longer term cd. Cd terms can go from a few months up to several years. Generally the longer you leave your money in the bank the higher the rate you will receive. 

Of course there may be other factors that you will want to take into consideration too. Things like customer service, hours of operation and ease of access for making deposits or opening accounts are a few of those. 

When your cd reaches maturity you can either take your money out or you can reinvest it into another cd. All of this should be clearly explained to you by whatever financial institution you decide to go with. 

You can invest in an online bank or an offline bank, the choice is yours. There does seem to be some evidence to suggest that online banks tend to pay a little higher interest. This is due primarily to the fact that they don't have the overhead that an offline bank has. 

Of course, they also don't have the ease of access, in some cases, that your local bank has. It can be nice to be able to go in, sit down and have a talk with your local banker. 

Ultimately, only you can decide which option is best for you. There are many elements to take into consideration before you commit to a particular cd term or a particular financial institution. 

There you go, a brief overview of the ins and outs of figuring out  certificate of deposit interest rate.