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How to Choose a Certificate of Deposit

This page will tackle how to choose a certificate of deposit (CD), with a particular focus on:

  • CD Terms
  • CD Types
  • CD Rates
  • CD Deposit

If you are looking to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or WhatsApp (+44-7393-450-837).

Investing in CDs means making a fixed interest rate deposit of money with a bank or other financial institution for a certain period, usually several months to years.

Although the profits on CD investments are often low, they can offer a reliable, safe, and consistent option to collect interest on funds.

How to Choose a Certificate of Deposit

How to Choose a Certificate of Deposit

CD Terms

The terms for CDs at banks or credit unions typically range from three months to five years.

Generally, longer-term CDs offer higher rates compared to their shorter-term counterparts. Further guidance on choosing your CD term is available.

CD Type

Different CDs come with unique features, such as a no-penalty CD that allows early withdrawals without charges or a bump-up CD permitting a rate increase during the term.

High-yield CDs, often found at online banks, function similarly to standard CDs but offer superior rates. Further details on CD types are provided below.

CD Rate

Once you’ve narrowed down the term and type of CD, comparing rates from various banks and credit unions is essential to secure a competitive rate.

Whether opting for a familiar bank or choosing a new institution depends on your preferences, but prioritizing a high rate is recommended. Current CD rates can be explored.

CD Deposit

The amount you choose to invest in a CD should align with your savings objectives, aiming to surpass the CD’s minimum deposit requirement.

It’s important to note that additional funds typically cannot be added after the initial deposit.

To mitigate the risk of a bank failure, ensure that the total in your accounts stays below the insurance limit set by the regulatory authority.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.



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Gain free access to Adam’s two expat books.

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