If you’re absolutely sure you won’t need the money for the period to which you agree, there aren’t many negatives to opening a certificate of deposit. The higher the amount in the account and the longer the agreed-upon term, the higher the rate of interest the institution will pay. The interest rates on CDs are usually significantly higher than the interest rates for a standard savings account. The average annual percentage yield for a standard savings account is around 0.08 percent. For certificates of deposit, it is around 0.76 percent. Each additional year the money remains untouched in the account increases the interest dramatically. The Federal Deposit Insurance Corporation backs many financial institutions, which means any investment is insured for up to $250,000.
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