What is a CD?
Remember when compact discs came along, and you realized you'd never have to rewind a cassette tape again? Well, now that you've replaced those CDs with a hard drive full of mp3s, we have another kind of CD you'll love.
A Certificate of Deposit is also commonly referred to as a CD. Unlike its musical homonym, however, this CD is a bank investment that won't go obsolete any time soon.
If you have cash you won't need for months or years, CDs are a wise place to invest it because they are guaranteed to grow at a fixed interest rate that's higher than other types of accounts.
How do CDs work? Let's say you have saved $5,000 you know you won't need for months or even years. You'll call or meet with a personal banker at Starion Financial who'll show you our current interest rates and terms.
Your banker will then print a Certificate of Deposit showing the rate and period of investment (plus all of the regulatory disclosures). A CD is really a formal record of your deposit.
You'll bring this certificate to the bank when the term ends. then, you can choose to "renew" the CD at any new term or use the money by placing it in one of your other Starion Financial accounts.
You can watch your CD add interest with online banking, where your CD will be listed along with other Starion Financial accounts.
If you need the money before the term is up, there will be a penalty on any portion you withdraw.
In short, a CD is a savings tool with the added formality of a printed "certificate" showing the terms of the deposit. Use it when you want a higher interest rate as your reward for committing to deposit the money for a set period of time.
You can invest any amount from $2,500 to millions in CDs, and terms can range from a few months to five years or more.