Investing in a CD is a great way to meet your savings goals. They have many benefits over other financial instruments that should be considered, and are one of the most preferred options for inexperienced investors. In this article, we’re going to give you five reasons why you should invest in CDs.
1. Insurance and Safety
Unlike investing in bonds or stock which can be high risk and volatile, CDs have a lower risk. You can rest assured that your money is in good hands and that you will get all the interest due. It is also critical that you confirm your financial institution is FDIC insured before you sign up for CDs. FDIC insurance will ensure that you get your money back should there be any form of failure or poor investment by your financial institution.
2. Fixed Rates
In spite of the fluctuating markets, CD rates are usually fixed for the entire term. You could always choose between either a fixed-rate, variable-rate, or adjustable-rate CD. All the rates are however quite high and don’t fluctuate with the current money economy ensuring you can always rest easy. A longer-term CD will give you much more return when compared to the short-term CDs. If you want to make more in interest rates, then ensure you opt for the long-term CDs lasting from around 3-5 years.