Difference between revisions of "Certificate of deposit"
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Generally speaking, the longer the contract term and/or the more deposited, the greater the [[interest rate]] offered. | Generally speaking, the longer the contract term and/or the more deposited, the greater the [[interest rate]] offered. | ||
| − | Any attempt to take money out of the certificate of deposit before its expiration date would result in a monetary penalty. However in most cases the penalty can be deducted from taxable income. | + | Any attempt to take money out of the certificate of deposit before its expiration date would result in a monetary penalty, usually a forfeiture of a portion of the amount earned. However in most cases the penalty can be deducted from taxable income. |
==See also== | ==See also== | ||
Revision as of 22:23, February 24, 2019
A certificate of deposit (CD) is a monetary option offered by banks where a client can put an amount of money into a certicate that is then tied up for the length of the contract at a set rate of return. Often a minimum amount is required, often $1,000 (though sometimes as little as $500 can be deposited).
Generally speaking, the longer the contract term and/or the more deposited, the greater the interest rate offered.
Any attempt to take money out of the certificate of deposit before its expiration date would result in a monetary penalty, usually a forfeiture of a portion of the amount earned. However in most cases the penalty can be deducted from taxable income.
See also
- Savings account: Inflation versus Interest rates