A CD is a certificate of deposit. It is an interest bearing instrument that requires you to keep your money locked up (Major penalties for early withdrawal). Also there is often a minimum deposit. Seven months is a very short term for a CD, your interest rate is likely annualized meaning you will earn 1/12 […]
Written on Sunday, July 20th, 2008 by kentonblackwell :: 0 comments to this post
A CD is a certificate of deposit. It is an interest bearing instrument that requires you to keep your money locked up (Major penalties for early withdrawal). Also there is often a minimum deposit. Seven months is a very short term for a CD, your interest rate is likely annualized meaning you will earn 1/12 of that per month for seven months or .248333333. Depending on the instrument the interest may be compounded (Put back into the Principal where it will earn interest) or deposited in another account. I would suggest looking into money market funds or my personal favorite an on line savings account (HSBC, or emigrant savings bank) these accounts offer similar rates but are much more liquid (They allow you to withdraw the money at any time), they also normally have lower minimum deposits.
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