Tips for Finding a Safe Certificate of Deposit

People choose to refrain from investing their money and having it work for them for many reasons. One of the main reasons that people give for not investing is because they do not think it is a safe investment. Certificates of Deposit, or CDs, provide a safe way to keep your money while it earns interest. If you are still unsure about getting a CD to help your money grow, here are three ways to see if the CD you are choosing is safe and secure.

1. Check the FDIC Coverage
FDIC stand for Federal Deposit Insurance Coverage. Many banks and financial institutions have this type of coverage, which means that your money is insured by the federal government up to a certain amount. Typically, the amount is either $100,000 or $250,000, but check with your financial institution to be sure. This means that if the bank at which you have your CD fails or goes bankrupt, your money will still be safe. When a bank goes under financially, another bank often buys its assets. Your CD would then transfer to the new bank and the whole transaction would require very little (if any) action on your part.

2. Research the Financial Institution
Before you take out a CD with a particular financial institution, do your homework. Of course one of the first things you want to find out is which one is going to offer you the best interest rate for your money. Different banks offer different interest rates for their CDs so all banks are not the same. But in addition to finding the best rates, check the strength of the financial institution. Great interest rates does not always mean security for your money. There are websites that grade various institutions so you can feel more secure about where your money is going to go.

3. Find a Local Institution
You can find a wide variety of banks online that will offer great rates on CDs. However, there is a more secure feeling about being able to walk into your institution to talk to a teller in person about your Certificate of Deposit. That’s not to say that online banks or banks that aren’t local are not safe and secure because they are. But having a local branch provides a peace of mind that some people appreciate when they are investing their money.

CDs are safe ways to make your money work harder for you. If you can get past any hesitations you have concerning investing, it would definitely be beneficial to consider putting your money in Certificates of Deposit for great results.