Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
“`html
Are you considering buying a certificate of deposit (CD) to earn more interest on your savings? A CD is a savings account that allows you to deposit a specific amount of money for a set period, or term, and earn interest at a fixed rate. At the end of the term, your account matures, and you can withdraw your deposit plus interest. Most CD accounts require a minimum of $500 to $2,500 to open an account, although some have no minimum deposit requirements.
A major difference between CDs and regular savings accounts is that if you withdraw cash from a CD before it reaches its maturity date, you’ll typically pay a penalty. In return for restricting access to your savings, however, CDs typically deliver higher annual percentage yields (APYs) than standard savings accounts. Here’s what to know about CD costs, how to save up for a CD, and alternative savings options to consider.
CDs that have higher minimum deposits generally offer higher APYs. For example, jumbo CDs may require a minimum deposit of $100,000 or more. There may also be higher minimum deposits for CDs with specialized features, such as step-up or bump-up CDs, which allow you to adjust the interest rate during the CD’s term.
If you want to get a CD but your bank balance isn’t quite there, take these steps to save money:
Maybe you don’t have enough money to open a CD. Perhaps you don’t want to tie up your funds for the term required. There are other ways to save money while earning interest. Consider the following alternative savings options:
The savings accounts mentioned above generally have a variable APY. That means your interest earnings can change as interest rates rise and fall. If you prefer a guaranteed rate, a CD may be the best option.
Whether you choose a money market account, standard savings account, or high-yield savings account, protect your money by choosing a bank or credit union insured by the FDIC or the National Credit Union Association (NCUA). Your savings will be guaranteed for up to $250,000 per account holder and account ownership category.
Consider interest rates, fees, and minimum deposit or minimum balance requirements when determining the best place to sock away your savings. If you’re not sure how soon you’ll need to access your funds, a money market account, high-yield savings account, or traditional savings account will give you the greatest flexibility. However, if you can leave your money in a CD for three months or more, you could earn interest at a guaranteed rate.
Saving money is just one aspect of your financial health. While you’re making a budget to build your savings, make it a habit to check your credit report at least once a year, and consider signing up for Experian’s free credit monitoring service to get alerts of important activity on your Experian credit report.
For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you achieve your financial goals!
“`