Earn more than a bank’s savings account. Is a certificate of deposit right for you?

A certificate of deposit can be a good way to earn interest in lieu of a savings account.

Actually, CD’s interest rate can be twice as much as a traditional bank, but there are some questions you should ask first to determine if it’s right for you.

  1. How soon will you need the money? With CD’s you usually can’t touch the money for 3 months to 5 years.
  2. What are the fees? If you have an emergency and need that money, how much will it cost to withdraw it early?
  3. Is it the best interest rate? Shop around to find the best rate.
  4. Biggest bang for your buck. Experts say you should beĀ able to find rates from about 2.5 – 3 percent for a 5-year term.
  5. Lastly, make sure your investment is FDIC insured.

CD Calculator: Find Out How Much You Can Earn

Reporter:Allison Gormly
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