2007-02-16 05:42:11 · 7 answers · asked by LKJ 2 in Business & Finance ➔ Personal Finance
I assume you mean a Certificate of Deposit, not a round shiny thing. A CD is an investment/savings account that is open for a fixed term with a fixed interest rate. This interest rate varies by financial institution and length of the deposit term. You can open one for as little as seven days to as long as ten years. Upon completion of that term, it will automatically renew. You can set it up so that the interest goes back into the CD or that it comes to you as a check or direct deposit into your account.
CD's offer a much higher interest rate than regular savings accounts. The catch is that they are not transaction accounts. Once you put money in, it stays there. You cannot add to it or withdraw from it until it matures. If you decide to close it out early, there is a penalty charged, usually at least three months' worth of interest.
They are a very safe investment with a guaranteed return. If you would like to set one up online, please check out the rates at:
www.1stsource.com Follow the links and you will be able to view more information about CD's and how you may invest online.
2007-02-16 05:53:41 · answer #1 · answered by centerstage 3 · 0⤊ 0⤋
A CD, (or certificate of deposit) is essentially a savings account with more restrictions on it. There is a term that the CD is good for, be it six months to 10 years. When you open a CD, there are certain minimum amounts that are required. Typically the CD's that are for shorter terms (6 months) require less money to start (~$500) and have the lowest rates of interest. The more money you put into a CD, for longer terms, will gain more interest. You cannot withdraw the funds from these accounts during the term, or you can lose any interest gained and will have to pay fees. Once the term is over, you can choose to withdraw the funds with the interest you gained, or reinvest it. This is not used as an operating account. You put the money in and forget about it until the term is up, then you get your money back plus a little extra. Your banks will probably have specials and specific limitations, so check them out, they'll walk you through it.
2007-02-16 06:03:04 · answer #2 · answered by mlynchltd 2 · 0⤊ 0⤋
A CD is a Compact Disk. a small optical disk usually containing recorded music or computer data
Could also be
1. banking certificate of deposit
2. military Civil Defense
3. abbreviation for cadmium, also candela, candle, cord
4. Corps Diplomatique ( often displayed on the backs of cars that belong to embassies )
2007-02-16 05:55:08 · answer #3 · answered by Jerry 7 · 0⤊ 0⤋
Certificate of Deposit.
Basically, you put in money for a certain period of time (say 6 months or a year). At the end of the period (or at intervals within the period), you get paid interest.
If you remove the money before the end of the period, you pay penalties.
It's good for when you want to put money away for a relatively short period (6 months to 5 years) and cannot afford to lose the principal. You won't make a ton on the interest, but it's usually better than a savings account or money market.
2007-02-16 05:50:58 · answer #4 · answered by Jay 7 · 1⤊ 0⤋
A Certificate of Deposit for a certain term bearing a certain interest rate higher than a regular savings account because you promise to allow the money to remain there for that term and the bank can rely on those funds for that time to invest.
2007-02-16 05:53:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Try the site below for research on this. Hope it helps.
2007-02-16 05:53:09 · answer #6 · answered by citronge69 4 · 0⤊ 0⤋
a compact disc
2007-02-16 05:50:17 · answer #7 · answered by Anonymous · 0⤊ 1⤋