HomePersonal Finance5 Reasons to Invest in a CD Account

5 Reasons to Invest in a CD Account

When you are thinking about making wise investment choices, choosing to place your money into a certificate of deposit is a smart choice. You can put your money in a certificate of deposit and usually find a link that says “click here to read more information” on a banking website to discover the interest rates. Keeping your money in a CD is a better choice than keeping your money in a savings account. Investing in CD is a great choice for these following five reasons.

1. You can find higher interest rates with CDs.

When you are comparing the rates on CDs, you will find that the rates for CDs tend to be better than other types of investments. On a CD, you will find that the rate of return tends to be two percent to five percent. These high interest rates will allow you to keep more of your money in your pocket. You will not have to lose money by investing in a risky stock or mutual fund.

2. CDs are traditionally safer than other investments.

When you invest in a CD, your money stays secure. You will not have to worry about your CD losing its value over the years. For a person who is on the brink of retirement, investing in a CD is a wiser choice than investing in stocks or mutual funds. One can be sure that his or her investment will not lose value over the years. One may also be able to earn dividends depending on the type of CD that he or she buys. Be sure to meet with a banking official to discuss the terms of your investment. A banking professional can help you understand how much money you can keep in your pocket with a CD.

3. You can track the growth of your CD online.

When you invest in a CD, you will be able to track the growth of the CD through an online bank account. You will be able to see exactly how much money you earn every year on your CD. It is always an empowering experience to see that you earn extra money with a CD that would not have been possible with a savings account.

4. You can opt out at any time.

If you need to access the funds that you have placed into a CD, then you can opt out of the CD at any time. You can decide to sell your CD back to the bank and have access to all of the funds that you have placed into the CD.

5. They make great inheritance gifts for children.

Passing on a CD to future generations is easy to do. If you want to do so, then you can meet with a banking professional and make this intention clear. Your children will then have the benefits of the growth of the CD.

Investing in a CD is a great option for those who want to stay away from the risky stock market.



  1. Even if you’re worried about the stock market, I think a better play than CDs are just about any conservative bond fund. You’ll probably earn 3-4% with the fund, versus the sub-1% that I’m seeing with CDs.

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