¿Qué es un certificado de depósito?

23 de enero de 2025

by Christian Phillips

Learn about financial tools that can earn more interest on your savings.

Finding practical ways to save for the future can be challenging. Certificates of Deposit (CDs) provide a secure investment option for those looking for a guaranteed return on their investment. Here’s what you need to know.

A CD is a type of savings account with unique terms and interest rates. Banks offer various term lengths, during which you commit to keeping a specific amount of your savings deposited. In return for that commitment, the bank will offer a fixed interest rate – generally higher than interest rates on the standard savings account offering.

You can see the current rates for Frandsen Bank & Trust CDs [HERE].

Are CDs FDIC-insured?
Yes, CDs are FDIC-Insured, up to $250,000.

When do you get the interest earned?
Once the CD reaches its term limit, it’s considered “mature.” Banks will often deposit your interest into the CD savings account at maturity. At that time, you can choose to move your money into another account. Many banks offer roll-over options, extending your CD's terms at maturity. It’s essential to review and understand your terms at sign-up.

What happens if you need to access my money before the term ends?
Early withdrawal penalties may apply if funds are accessed before the CD maturity date. Your bank will disclose this information when you open your CD and deposit the funds.

Favorable Interest Rates and Flexible Terms:
Reliability is vital in the investment world. With CDs, you know precisely how much your investment will be worth at maturity. This transparency makes planning for your future financial goals easier.

Unlike investment options influenced by market fluctuations (e.g., the Stock Market), CDs remain unaffected by economic downturns. This ensures that your investment retains its value during market and economic challenges.

If you’re interested in long-term savings like CDs, make an appointment with a Frandsen Bank & Trust banker who can help you find the right account and terms to achieve your financial goals.

¿Qué es un certificado de depósito?

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