Certificates Of Deposits As Investments
When you are in between investment or if you have opted out of the stock market for a time you may wish to look at two of the most popular investment choices around- certificates of deposits and money markets. Here we look at CD and money market rates.
While both CDs and money markets have their good and bad sides, money markets tend to be more superior. This is especially the case not for a novice investor but for someone who invests on a regular basis. The reason for this is because the money can be used on an immediate basis to buy bonds, mutual funds or stocks.
To put your mind at ease, CD accounts are safe. In fact everyone who tells you that certificates of deposit are safe is correct. To begin with, CDs always qualify for FDIC insurance from the governing body. In a single bank you are insured up to a maximum of $250,000 in the event that the bank should fail.
Not only will you be notified of the date but the options left up to you will also be explained. If you choose to do nothing then what will happen is your CD will roll over into a new one and it will be for the same length of time as the original one was for.
If you wish to do a CD cash because you need the money for your own purposes then on the date the CD matures go to the bank. Make sure you take with you the certificate you were given when you made the investment and a piece of photo identification. It is very important that you do this at this time and do not wait a few days. If you wait until the date of maturation has passed then to cash out your CD will involve you having to pay a significant monetary penalty.
If you are someone who is regularly taking money out of your savings account then you need to realize that it does not work the same with a certificate of deposit. The maturation time of a certificate of deposit can range anywhere from a few months to a year to 10 or 20 years.
Think very carefully about the length of time you can go without the money you wish to invest before you actually invest it. CD accounts are not the same as savings accounts and you must be well aware of this before you make the decision to invest in this manner.
Article Source: FxTradingStock.com
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by: James A Jackson
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Date: Wed, 26 May 2010
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