Invest Safely with Certificates of Deposit
Certificates of deposit are one of the safest methods of investment available. They’re protected by the Federal Deposit Insurance Corporation (FDIC) within limits, and you receive a fixed rate of interest over a set time. Stated plainly, you collect interest over time for keeping a deposit in the bank over a specified time. You also earn compound interest with CDs by collecting it on your principal, future interest on said principal, and interest you’ve previously earned. Sun Cities Financial Group welcomes you to come to one of our locations to discuss investing in CDs.
The Annual Percentage Yield (APY) is the rate you earn annually when accounting for compounding interest. The APY is calculated based on how many months you hold that certificate. For example, if you make a $10,000 deposit with an APY of 2%, you get $50 in interest for the first three months, $100 for six months, and $200 for 12 months. The longer your money stays in the bank (“the term”), the higher your interest payments get. There are penalty charges for withdrawing before end-of-term, consuming your interest and possibly part of your initial deposit.
CD Deposits: What You Need to Know
CDs are available through deposit brokers, credit unions, and banks, where you supply an array of personal information and choose a term for your CD. There are CDs available online through some banks, and you just need to call somebody at the bank if you have questions. There’s a variety of options for CDs. You can find better return rates, different penalties for early withdrawal, etc., depending on the length of term. You’ll be able to decide between monthly or annual interest payments for most CDs, and many people decide to reinvest their compounding interest back into the CD. Once your account is set up, making a deposit is clear and simple.
What is a Brokered CD?
Brokered CDs are through deposit brokers, who will sometimes offer investors higher rates than a bank or credit union. Banks who do business with brokers must have a high financial stability level. If a bank has a high demand for loans and wishes to increase incoming deposits, or they’re trying to expand their customer base, they’ll work with brokers. Brokers can afford higher rates because of the volume of deposits: the higher the volume, the higher the rates. Banks also save on overhead costs when they expand their customer base, so it’s less expensive for brokers to offer higher rates than to open new branches.
Contact Us to Get Started Today
Sun Cities Financial Group works with over 6,000 banks to find the best one for you. We offer some of the country’s best CD rates with higher yields than your typical bank. To find out more about CDs, call us or stop in today! We’ll make sure your money is taken care of with your best interests at the forefront of our concerns.