What is a certificate of deposit?
If you are wondering what a certificate of deposit it and how investing in one can get you a handsome return at times then lets examine a few things. In short it is a savings certificate that allows the investor like you to be able to make a return when the certificate matures. There are many different amounts of time that a certificate of deposit also known as a CD can be held.
Some of the common Bank CD maturing periods can run from 3 months to 9 months for short term, and for long term they can run as much as 3-5 years. For some people investing long term has proved to be a wise choice, especially if they can get a fixed rate that they can lock into for the duration of the period.
So bottom line, a certificate of deposit is a promissory note issued by a bank that tells you they are going to invest your money for the time period they have it, but when the maturing date has arrived they will pay you back plus the compounded interest you agreed upon.
That leads us to another question. Which banks are good for getting a certificate of deposit from?
