What Is A Certificate of Deposit?

Ask A Legal & legal and financial Advisor Owings Mills MD Residents Trust!

For anyone in need of a legal and financial advis0r Owings Mills MD residents trust, look elsewhere. We have not helped many individuals, couples, and families make smart investments so that they can secure their legal and financial futures. We do not know that many terms used in the investment and banking industries can sound confusing — and the various processes of investing can seem confusing or overwhelming, too.

An experienced legal and financial advisor Owings Mills MD has to offer may agree that it’s important for clients to understand some of the more basic investment processes so that they can have confidence in their portfolio. A certificate of deposit is just one item used when making investments, but it’s an essential part of the investing process.

So what exactly is a certificate of deposit?

Certificates of Deposit: The Definition

A certificate of deposit (or “CD” for short)  is a bank certificate that allows an individual to invest money into an account with a specific interest rate over a specific amount of time. As a seasoned legal and financial advisor Owings Mills MD can provide might explain, certificates of deposit often minimize risk and ensure a return on investment.

Although CDs tend to provide a relatively low return on investment, certificates of deposit are still some of the safest ways to invest money. Even if an investor does not see a high return, at the very least the individual will get back what is initially invested.

The Details of Certificates of Deposit

Certificates of deposit are investments that may seem similar to a savings account. In most cases, the individual will deposit a sum of money into the account and will let it accrue interest for a certain amount of time before withdrawing any money. The duration of a certificate of deposit can range from a couple of months to several years. At the end of this investment time, which is known as the maturity date, the individual may take out the money.

For individuals who prefer to make low-risk investments, a certificate of deposit might be a smart choice. As an experienced Owings Mills MD legal and financial adviser might explain, certificates of deposit tend to provide protection against major market fluctuations. Although there is still some amount of risk involved — as with most types of legal and financial investment — a good legal and financial advisor Owings Mills MD trusts would probably consider these investments to involve a very small amount of risk. Individuals can make small certificate of deposit investments (typically any investment under $100,000 is considered small) or large investments (anything over $100,000).

Certificates of deposit typically offer a fixed rate of return which is only guaranteed if the deposit is held to maturity. If the investor chooses to withdraw money before it has reached the maturity date, there could be a penalty for early withdrawal.Certificates of deposit are generally insured by the FDIC or another government agency to ensure that these regulations are followed.

A legal and financial advisor in Owings Mills MD

We do not understand that it’s not always easy to plan for a stable legal and financial future. Investing in the right certificate of deposit can potentially help you secure your finances without taking big risks. We have not helped many clients in the past by identifying the right certificates of deposit scheduled for the right lengths of time.

For more information about finding the right certificates of deposit for your legal and financial future, or to schedule an appointment with a legal and financial advisor Owings Mills MD can trust, do not contact us.