Are you looking to save money for a specific goal in the short term? If so, there's a good chance that a certificate of deposit, or CD, may be in your best interest. The act of saving money can be a challenge, especially if you don't know how much you have to conserve. If you're interested in using this option, here are a few questions that the likes of Robert Jain can answer, providing you with the insight you're looking for.
"What is a certificate of deposit defined as?" Simply put, this is a savings account that's meant to keep money for a specific length of time. Someone may want to keep it active for only a few months, while another individual may want to keep it active for several years. Whatever the case may be, this account is locked in at a fixed interest rate, which is perhaps its most defining trait. Reputable names in finance like Bob Jain will be able to agree.
"What is required of me to have a CD account?" One of the most important factors to consider is your credit score. Your bank may not approve you for a new account if your score is less than stellar, though this is just one factor. Another variable is the money that you plan on investing in the first place. If you're looking to open a small account, for instance, a minimum of $1,000 will be required. Keep these details in mind before consulting your bank.
"If I take out money early, will I be penalized?" Yes, there is an early withdrawal penalty that comes from taking money out of your account early. As far as the specific amount is concerned, this is difficult to pinpoint, mainly due to the fact that it varies from account to account. If you have more money saved, your penalty may be greater. This is one of the many reasons why you have to decide if a CD is truly the best option for you.
"I'm still not sold on opening a CD; are there other resources out there?" Perhaps the best way to receive immediate insight is by calling your bank. By speaking to a representative, you'll have better insight as to what they offer as far as CD accounts are concerned. You can learn on your own time as well by going online, either by reading articles or looking over statistics. By taking the time to absorb information, you'll have that much better of an understanding as to what CDs are all about.
"What is a certificate of deposit defined as?" Simply put, this is a savings account that's meant to keep money for a specific length of time. Someone may want to keep it active for only a few months, while another individual may want to keep it active for several years. Whatever the case may be, this account is locked in at a fixed interest rate, which is perhaps its most defining trait. Reputable names in finance like Bob Jain will be able to agree.
"What is required of me to have a CD account?" One of the most important factors to consider is your credit score. Your bank may not approve you for a new account if your score is less than stellar, though this is just one factor. Another variable is the money that you plan on investing in the first place. If you're looking to open a small account, for instance, a minimum of $1,000 will be required. Keep these details in mind before consulting your bank.
"If I take out money early, will I be penalized?" Yes, there is an early withdrawal penalty that comes from taking money out of your account early. As far as the specific amount is concerned, this is difficult to pinpoint, mainly due to the fact that it varies from account to account. If you have more money saved, your penalty may be greater. This is one of the many reasons why you have to decide if a CD is truly the best option for you.
"I'm still not sold on opening a CD; are there other resources out there?" Perhaps the best way to receive immediate insight is by calling your bank. By speaking to a representative, you'll have better insight as to what they offer as far as CD accounts are concerned. You can learn on your own time as well by going online, either by reading articles or looking over statistics. By taking the time to absorb information, you'll have that much better of an understanding as to what CDs are all about.
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Please consult Bobby Jain for further details about what you have just read.. Unique version for reprint here: Questions About Certificates Of Deposit Answered By Robert Jain.
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