What is a Certificate of Deposit?

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Once upon a time, when you set up your certificate of deposit (CD) account you received an actual sheaf of paper to stand for the money you’d invested. That’s where the actual name for this type of savings account comes from. These days, it’s highly unlikely that you’ll receive more than a reference number or confirmation e-mail to signify that you’ve established a CD account; but instead, the name stands for so much more. It represents what many consider to be an extremely safe, low-risk investment procedure.

The first thing you need to know about a certificate of deposit is that it requires you to have a sum of money stored away that you don’t intend to touch for awhile. How long? Well, that’s up to you and the financial institution you’re working with. Your CD term can be anywhere from six months to five years – or more. For example, the Discover Bank certificate of deposit intervals range from three months to ten years. Whatever that total is, it means you cannot – without surrendering a large penalty fee – touch your own money again until the period has concluded.

The longer that you put your money away, the more it’s going to earn. Using Discover Bank’s rates as of April 2011, a five-year rate of 2.35% means your $ 10,000 becomes $ 11,232. And you don’t have to do anything but wait – it’s that easy. The same amount invested at the same institution for ten years becomes $ 13,439. Of course, some variables and limitations do apply, so be sure to speak to someone you trust who can answer all of your questions and point out all of the smaller details when you’re setting up your CD.

These numbers are not guesswork. Before you sign the final dotted line to get your certificate of deposit started, your broker should be able to tell you exactly how much you’re going to withdraw when your money reaches maturation. In other words, given the amount and the length of investment, you’ll know exactly what you’re going to bet back – including interest. And this agreement is federally protected, so you don’t have to worry about the economy ruining your chances of getting back the total you’re owed.

The other thing that you should consider before you even get started is your renewal plan. You can agree to an automatic renewal when the term is up. This doesn’t mean that you won’t be reminded or notified, but it does mean that you don’t need to reply in order for the financial institution with which you’re doing business to keep your money for another fixed amount of years (you can, however, choose to opt out during a certain window of time). The benefit here is that you can usually keep the same rate that’s in place, no matter what rate the bank or financial institution is current offering to new, exactly identical accounts. If you originally secure a great rate, this can be very advantageous.

 

T.M. Murphy is a professional writer who lives in NYC. She specializes in fashion, beauty, marketing and finance articles. For easy-to-understand financial and banking advice to use on topics such as the Discover Bank certificate of deposit, she turns to http://www.discoverbank.com. T.M. Murphy has been writing full-time since 2006, when she graduated with a B.A. in English from Northeastern University.


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We want to help you get that degree. Consider:

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  • Degrees offered include Bachelor of Science in Accounting, Bachelor of Science in Business Administration, and Master of Business Administration.
  • Students are instructed in relevant business skills like communication, mathematics, and management.
  • Coursework emphasizes the development of project management, communication, decision-making, and problem-solving skills.
  • Flexible, 100% online and campus based programs available.

Programs:

  • BS in Accounting
  • BS in Accounting - Managerial Accountancy
  • BS in Accounting - Public Accountancy
  • And more...
  • Earn Your Bachelor's Degree in Business with GCU's Colangelo College of Business!
  • Emphases: Accounting, Applied Mgmt, Business Admin, Business Mgmt, Finance and Economics, Marketing & more.
  • Develop and refine skills in core areas such as economics, accounting, marketing, statistics, org. behavior, and legal and ethical issues.
  • Serving undergraduates who are preparing to initiate careers & working professionals who are seeking to develop their careers further.
  • Accredited by the Accreditation Council for Business Schools & Programs (ACBSP).

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  • B.S. in Accounting
  • B.S. in Finance and Economics
  • Recognized in the first Best for Vets: Business Schools list in Military Times Edge magazine’s 2013 “Best for Vets” edition.
  • Offers MUSE (My Unique Student Experience), a content delivery system that gives students the option to watch, view, read or listen to required course materials.
  • Allows students to complete courses at whatever pace they want.
  • A DANTES-affiliated university and member of the Service Members Opportunity Colleges.
  • Offers IntelliPath, a proprietary learning technology that lets students learn at their own pace.

Programs:

  • Bachelor of Accounting
  • Bachelor's (BBA) - Accounting
  • Bachelor's (BBA) - Finance
  • Earn your degree online from Ashford University!
  • Choose from Undergraduate and Graduate classes
  • Business, Health Care, Psychology and Liberal Arts programs to choose from
  • Apply Now! Classes begin every Tuesday!

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  • BA Finance

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Programs:

  • Bachelor of Science in Accounting
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Centura College, with campus locations in Virginia, South Carolina and Florida, is dedicated to helping students gain the skills and attitudes necessary to succeed. Drawing from over 30 years of career school experience.

Programs:

  • Associate of Applied Science Degree in Business-Concentration in Accounting Administration
Locations:  Chesapeake
  • Online and ground-based program areas include Fashion Marketing and Management and more.
  • Students can study branding, event management, and public relations to help them prepare for a marketing career
  • Course topics include Fundamentals of Business, Brand Strategy, Project Management, and Principles of Market Research
  • Over 50 locations nationwide, with a student support team dedicated to helping students grow
  • Join our next Open House on 2/15!

Programs:

  • Marketing & Entertainment Management (BS)
  • Fashion & Retail Marketing (AS)

As a student at South University, you will have the opportunity to learn from accomplished faculty members who have real-world experience in the subjects that they teach. Our small class sizes allow you to receive personalized attention from instructors, and the encouragement to recognize your goals for the future and the means to achieve them.

Programs:

  • Business Administration (BBA)
Locations:  Glen Allen