Choosing a CD Wiselyby FDIC
How can you choose a CD wisely, especially if you're considering a nontraditional kind? First, think about how much money you're willing to keep untouched at the bank and for how long. Remember that if you have to withdraw the funds before maturity, you will pay a penalty, usually a loss of some or all of the interest you've earned and perhaps even some of your principal (the amount you deposited). Next, shop around for the highest interest rates for the CD amount and time period you're considering. In general, the larger the deposit and the longer the maturity, the more interest you can expect to earn.