Certificates of deposit are a long term investment for very little risk. Banks or institutions that sell certificates of deposit or CDs are using your money for a specified amount of time to make investments themselves. The interest rates for certificates of deposit are variable and determined by two different factors. Certificate of deposit rates […]
Many investors are not aware of the fact that you can protect your certificates of deposit or CD above FDIC (Federal Deposit Insurance Corporation) coverage limits. FDIC covers CD investments up to a maximum allowed by law per investor and institution. If you have more certificate of deposit investments in one institution than the FDIC will cover and the bank becomes insolvent, you will lose the difference between your investment and the FDIC coverage. CDARS, or the Certificate of Deposit Account Registry Service, will help you have all of your investments covered by FDIC.
Investors seeking the best low risk, higher than normal interest rate or yield on their investments consider certificates of deposits or CDs.