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Looking For a Safe Investment? Try a Certificate of Deposit
If you are looking for a safe investment and you have between $100 -$1,000 to invest, you should consider a certificate of deposit or CD. When purchased through a bank, CD's are federally insured up to $100,000. When you invest in a certificate of deposit, you are lending your money to the bank for a set period of time at a fixed rate of interest. At the end of that time period, the bank pays you back your investment with the interest you've earned. The annual interest earned is reflected by the annual percentage yield or APY. There are several details to consider before investing in a CD. First, find out when the CD will mature? Banks offer certificates of deposit with maturities ranging from 3-months to 10-years or more. Figure out how much to safely invest and how long you feel you can leave that money alone so that it earns interest. Also, make sure you get the maturity date in writing. Second, you'll want to know the annual percentage rate (APR) you'll earn on your investment. Investing larger sums for longer terms usually earns the best interest. However, even a small investment can earn you higher interest than a traditional passbook savings account. Next, find out how the interest is compounded - daily, monthly, or annually? Daily compounding is best because it earns you more interest. You can shop for the best CD rates at www.bankrate.com or check with your personal banker. Shopping on the internet, I found rates for a $1,000 1-year CD in my local area ranging from 2.96 to 3.97 APR and a 3.00 to 4.05 APY respectively. So if I invested $1,000 at 2.96 APR, at the end of 12 months I'd get paid $1,030.00 by the bank (figures computed with interest compounded monthly). That same $1,000 invested at a rate of 3.97 APR would return $1040.43. Interest rates are usually locked in for the term of the CD, although some banks allow you to take advantage of higher interest rates by converting your CD. This type of CD is called a "step up" CD. Generally, banks will only let you "step up" once during the term of the CD. What happens if you withdraw your money before the certificate of deposit matures? Your bank will impose an early withdrawal penalty, which can vary depending upon the maturity date and the amount invested. It's important to invest only money you can truly afford to leave alone for the term of the CD. As with any investment, make sure you understand all the terms, fees, and any penalties before you purchase. Copyright 2005, http://www.yourfreecreditreportnow.com James is editor of "TO YOUR CREDIT", a free weekly newsletter with tips to help you manage your personal finances. Subscribe today and receive his e-book "IDENTITY THEFT- How To Avoid Becoming the Next Victim!" and other money-saving bonuses by visiting http://www.yourfreecreditreportnow.com
Latest News:Site: Yahoo! News Search Results for news 2002's News, Yesterday's Sell-Off (Washington Post) A six-year-old article mistakenly seen by Bloomberg financial news users yesterday reported the bankruptcy of United Airlines and triggered a massive sell-off that nearly obliterated the company's stock in a matter of minutes. Lesson 6: Broadcasting news (BBC News) Students practise reading the news and produce a news programme adhering to a strict deadline. ABC News campaigning in all 50 states (Reuters via Yahoo! News) ABC News will be hitting the road -- and the rails -- for a whirlwind tour of all 50 states before the November election. Lesson 5: Ordering news (BBC News) Students order several reports to make a news programme which appeals to a specific audience. Lesson 3: Writing News (BBC News) Students write a news script which is clear, concise and correct - the three Cs of journalism. UAL shares walloped by new posting of old news (Reuters via Yahoo! News) A nearly 6-year-old news story on the 2002 bankruptcy filing of UAL Corp resurfaced on the Internet on Monday, clobbering the airline's shares as some traders mistook the report as current and plausible news. ABC News hammering out Palin interview plans (Reuters via Yahoo! News) ABC News is spending more time trying to assemble the logistics of its exclusive interview with Republican vice presidential candidate Sarah Palin than it did negotiating with the McCain campaign itself. Game news: 'GTA IV' hits 10 million, EA meets ESPN (AP via Yahoo! News) Real news from the virtual world: Column: 'Daily Show' Is One Of Few Fair And Balanced TV News Shows (CBS News) I have this silly little habit of watching the Fox News Channel when I'm bored or in some weird self-loathing state of mind. So for the Republican National Convention, I thought it appropriate to bathe in their conservative credibility instead of the CNN/Barack Obama PDA I witnessed the week before. Google News snafu leads to airline stock plunge (CNET) After an investor news wire service mistakenly highlights a 6-year-old news story (allegedly sans time stamp) about United Airlines filing for bankruptcy, shares of the carrier tank. Warning: MagpieRSS: Failed to parse RSS file. (> required at line 14, column 29) in /home/.hellodolly/jsteiner64/scholarlyarticles.org/investing/magpierss/rss_fetch.inc on line 238 Site: Warning: Invalid argument supplied for foreach() in /home/.hellodolly/jsteiner64/scholarlyarticles.org/investing/inc/ads-body.inc on line 52 MORE RESOURCES: Site: Yahoo! News Search Results for investing Investing for your kids' and your future (CNN Money) Talk about investing in uncertain times. At the beginning of last year, Susanne Elliott was downsized from her management position at a record label. Then, just two months after she found a similar job at a competing firm in August, the bear market struck. Virtual investing platform UpDown.com gets $1m investment (Finextra) UpDown.com, the leading social platform for virtual investing, today announced a $1 million investment from Switzerland-based angel investor Joachim ... Virtual Investing Platform UpDown.com Receives $1M Funding From Swiss Angel (CBS News) The virtual investing social gaming platform UpDown.com secured a $1 million investment from Switzerland-based angel investor Joachim Schoss, bringing its total funding to over $2.2 million. Started by three Harvard entrepreneurs in September of last year, the Cambridge, MA-based UpDown also offers a stock market game that gives members $1 million in virtual money to invest and capabilities to ... BRIC Investing: China (AskMen) Like this list? Buzz Up on Yahoo! BRIC Investing: China Goldman Sachs coined the acronym BRIC in 2003, in a global economics presentation designed to introduce their clients to the countries they believed to be the four dominant emerging markets of the future. Puget Sound Energy Investing Heavily in Electric and Natural Gas System Infrastructure to Meet Customer Needs Now and ... (wallstreet:online AG) Puget Sound Energy (utility subsidiary of Puget Energy (NYSE:PSD)) is investing approximately $421 Puget Sound Energy Investing Heavily in Electric and Natural Gas System Infrastructure to Meet Customer Needs Now and ... (Business Wire via Yahoo! Finance) BELLEVUE, Wash.----Puget Sound Energy (utility subsidiary of Puget Energy ) is investing approximately $421 million in service-area infrastructure improvements in 2008, of which about $247 million is earmarked for capacity and reliability upgrades, and about $174 million is allocated to meet growing customer needs. Chasing Blockbuster Drugs, Using Chinese Help (BusinessWeek Online via Yahoo! News) When Curis (NasdaqGM:CRIS - News) went public eight years ago, it symbolized the unbound optimism of biotechnology. Its stock rose fast, to 25, and it possessed promising technologies. Ever since, Curis has illustrated the risks of investing in biotech startups. There have been heartbreaking setbacks in clinical testing, failed partnerships with Wyeth and Procter & Gamble , and collaboration ... Prospects of investing in emerging markets brighten (MENAFN) Prospects of investing in emerging markets brighten Questions About Online Brokerage? Reverse Mortgages? 401(k) Investing? FINRA Launches New Podcast Series to Give ... (Centre Daily Times) The Financial Industry Regulatory Authority (FINRA) today launched a new series of Investor Podcasts that provides clear, unbiased information on a variety of financial issues in an easily accessible format. How to Start Investing in Miami Real Estate Market (Turks.US) Want to invest properties in Miami real estate market? But, do you have any idea on how it works, on how to get the right properties and gain great deals? Warning: MagpieRSS: Failed to parse RSS file. (> required at line 14, column 29) in /home/.hellodolly/jsteiner64/scholarlyarticles.org/investing/magpierss/rss_fetch.inc on line 238 Site: Warning: Invalid argument supplied for foreach() in /home/.hellodolly/jsteiner64/scholarlyarticles.org/investing/inc/rss.php on line 26 |
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