Don’t leave your savings to chance!
We applaud you for doing your research regarding various savings options for your hard-earned money. If you’re looking for a place to build up emergency savings or lock in higher fixed interest rates for a specific goal, then a Certificate of Deposit (CD) is an ideal choice. Regardless of where you are in your financial journey, it’s wise to set money aside to save for a rainy day or a short-term savings goal.
In the past, you may have heard parents, grandparents, or seasoned co-workers talk about opening a CD or “cashing out a CD” and it’s important to determine if this type of savings account is still relevant today. The good news is that CDs are still an excellent way to save!
What is a CD?
To get started, let’s learn what a CD is and how it can help you save. Simply put, CDs are types of savings accounts offered by financial institutions. Part of the agreement of a CD is to keep an established amount of money in it for a specified period of time and, in exchange, you benefit from locking in the high interest rate.
Often, you’ll find more favorable CD rates versus standard savings accounts; however, per the specific CD agreement, withdrawing money early before the CD’s maturity date will often result in paying a penalty.
What are the benefits of a CD?
A CD is designed for anyone who wants to increase their savings, save for a specific goal, or put some money into an account that is “out of sight and out of mind.” Alicia Kallal, First Bank’s Product Management Officer, said, “A CD is a great tool to use to put some money aside for a savings goal that you know is coming up. Plus, you get to lock in higher interest rates.”
She added, “It’s even a great safeguard to know the money is set aside and not easily accessible. For many, this makes it even easier to save.”
Are there specific uses for a CD?
Although you can use a CD to save for whatever you’d like, often, savers use them to save for a specific purpose. “CDs are a great way to sit back and watch your money grow,” said Kallal. “CDs can be the perfect savings tool for everyone 13 and up.1 Select the term that works best for you and watch your savings increase!”
Here are just a few ways to use a CD:
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Save for a down payment on a house!
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Put money aside for a rainy day or emergency!
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Save for a new roof, windows, or solar panels!
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Save for a wedding or honeymoon!
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Any reason you choose!
Find the time length that best aligns with what you are saving for, review the CD rates and terms of the agreement, open an account online or in a First Bank branch with the required minimum of $1,000 deposit, and get started with your savings goals.
Learn more about First Bank’s CD options.
Are CDs FDIC insured?
Great news! CDs are insured by the Federal Deposit Insurance Corporation (FDIC), meaning your money will be protected up to $250,000 per depositor, per FDIC-insured bank, per ownership category. In addition, as long as you keep your money in the CD for the term of your agreement, you’ll earn a secure, fixed rate on your money.
If you’re looking for a place to put your money for your longer-term savings, such as wealth building for retirement, you’ll want to consider adding a Roth or Individual Retirement Account (IRA) to your overall savings strategy. Are you wondering what kind of savings solution is right for you? Read more at, "Which Kind of Savings Account or Solution is Best For My Needs?"
Fire up your savings with a CD from First Bank by visiting a branch, opening a CD online or contacting us.