Are you looking for a way to save your money without spending it again later? When you open a savings account, you are putting money in the bank in an attempt to save it for some future purpose. However, we often end up using that money as we see something we want, or we run into hardship and have to use that money. What is a great way to overcome this hurdle? One option is to get a certificate of deposit from the bank.
The COD basically is a lump sum payment that you are making to the bank of your choice. The bank will then pay you interest on that money for a period of time. The only stipulation is that you cannot withdraw that money, or you lose the interest and sometimes have to pay a penalty to withdraw.
So what are the good reasons to invest in a COD? The best benefit is that you are not tempted to take your money out and try to spend it on something. The money will be safely tucked in the bank until the time period is up, and you can take your money and do whatever you want with the money.
Another benefit to making use of the COD is that you are going to get a set amount of money from the bank at the end of the period of the COD. This means that you know what you are getting and you can definitely plan for that money to be there for you whenever the COD expires and you get your money back.
When you get a COD, you can choose how long you want your money to be in the bank for. Most people will take a six or twelve month COD, but some places will allow a nine month COD and others will allow for longer term COD’s in case you are trying to save for something in the longer term. Those COD’s will typically garner more interest than the shorter ones.
A COD might not have the best interest rates of the investments that you can make, but they are the safest and guarantee some sort of return on your investment. Buying a COD will ensure that you get something for your money in these tough economic times, and will make sure that you don’t go out and try to withdraw the money before it has a chance to gain all that interest for you.