We put 500 on a cd for my daughter when she is 18......someone ask ....whats a cd......how do i explain it??
2007-01-10 13:58:26 · 5 answers · asked by Crystal M 2 in Business & Finance ➔ Personal Finance
Depeding on the age of the person who asked this question, you could do a couple of things.
The easiest way to explain a CD is to simply say it's like a short-term annuity, but if that won't help, you can explain it like a savings account.
You can explain that it's just like opening up a savings account that you plan on keeping only for a year. The only difference is that you don't take money out of the account, and you don't put more money into it (and hopefully this person understands interest). Then at the end of the year (or however long the term was on the CD), you close up the savings account, and you get back all our money, and you also get more money back in interest than normal, because you didn't take any money out of it.
2007-01-10 14:21:23 · answer #1 · answered by LongSnapper 4 · 1⤊ 0⤋
A CD is a "certificate of deposit" it is a contract between you and the bank in which you agree to deposit money into the bank for an extended period of time effectively "loaning" the bank your money, in exchange they pay you a higher interest rate than they would a savings account or checking account.
2007-01-10 14:04:51 · answer #2 · answered by godsize_2k1 1 · 1⤊ 0⤋
Get free rates
2015-02-20 19:58:51 · answer #3 · answered by Karsten 1 · 0⤊ 0⤋
Musical money???
2007-01-10 14:02:47 · answer #4 · answered by Anonymous · 0⤊ 2⤋
certificate of deposit --proof you deposited the money
2007-01-10 14:02:38 · answer #5 · answered by NuncProTunc 3 · 1⤊ 2⤋