Beginning Bank CD Investor
If you're just getting started with bank CDs, you should learn the basics. They pay higher returns because you promise to keep your money invested for a certain length of time. You'll need to know some basic terms and concepts to take advantage of CDs and make smart decisions.
Once you know the rules of the road you can put your money in a CD and watch it grow.
Finding the Best Bank CD Rates
If bank CDs are not new to you, then you're ready to find the best rates. Learn about the factors that affect CD rates. Find out where to shop around, and where you're likely to find the best deals. You don't need to chase the highest rates (unless it's really worth your time to switch banks frequently), but you should at least demand competitive rates.
You'll also want to learn a few basic strategies that help you manage your CD savings. For example, staggering your CD maturity dates over time allows you to earn a decent return while enabling you to access your savings periodically.
CD Investor Pitfalls
Bank CDs, like everything in life, have their drawbacks. Remember that you're trading away some flexibility (the ability to use that money) for a higher interest rate from the bank. CDs are very safe, but it's possible to lose money in some circumstances.
If you know what to watch out for you'll probably never have a problem. Find out how to make sure you and your money have a long and happy relationship.