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Certificates of Deposit: Three Features You Should Know About

Posted by: RateAPY Bank Rates News
June 1st, 2010

Certificates of deposit are excellent investments that have a higher yield than most savings accounts and can be easily converted to cash. Be familiar with the following three features of any certificate of deposit you are are considering as an investment.

Certificates of Deposit: What You Need to Know

• Maturity Date. Eager investors sometimes get excited by high yield certificates of deposit and lose sight of their maturity date. Know the maturity date of the CD, and be sure it makes sense for your objectives.
• Identity Of The Issuer. Brokers sometimes offer higher yield CDs by promising to bring deposits to an institution. Find out which institution is getting your money. Make sure your CD is FDIC-insured.
• Call Feature. Some certificates of deposit allow the issuer to cancel your CD, if interest rates change. You will not have this right, but the issuer might.

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