Investing in Certificate of Deposit (CD) Accounts

As one’s assets and cash stocks increase, households and individuals have to look for financial instruments other than what is readily available and common. By diversifying the forms of funds, an individual can ensure maximum financial growth for their investment. After acquiring a savings account, getting certificates of deposit represents the next level of financial stability.

A school scholarship is a finance instrument that gives investors mid-term to long-term stability. Unlike saving accounts, certificate of deposit accounts are harder to convert. These accounts are also harder to move because it assumes that the investor applied for this option to save money. Thus, certificates of deposit are not as accessible as other savings instruments until the certificate of deposit matures. The interest on savings in certificate of deposit accounts is fixed throughout the term of the certificate of deposit. However, some banks allow individuals to hike up the interest once during the term of the investment.

Unlike a tuition, certificate of deposit accounts are secure investments, especially when compared to other savings options like mutual funds, stocks, and other private equity investments. Because of this “security,” interest rates on savings are lower compared to other instruments. At the same time, the bank may impose a fee if you remove some of your money before your CD matures. A special certificate of deposit arrangement allows you to withdraw the money from the interest earned. In this way, you can reap the benefits of the interest without debiting from the principal.

Account holders can get better interest rates if they allow a longer maturation period. Account holders with large sums of money on their certificate of deposit can also be given optimal interest rates. Certificate of deposit accounts are not just a smart alternative for other financial tools. They have become one of the primary financial tools for heavy savers.

2 Existing Comments

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  1. High Interest CD said:
    on October 5th at 08:43 am

    Can anyone tell me if it’s safe to invest in a certificate of deposit in the Philippines? It earns 18% Tax free and it’s insured. I have no idea.

  2. Best CD Rates said:
    on May 22nd at 02:12 pm


    Most probably your CD rate is not in US dollars but in Phillipine currency. Thus you are exposing yourself to currency risk.

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