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By: Ikedi Ani-okoye

Certificates of Deposit

When you are banking you will usually be saving or getting money out of the bank, this may be your own money or a loan. Using the bank can also help you to increase your money. A good way to make some money from the bank is to have a savings account called a certificate of deposit.

If you have a certificate of deposit it can help you save and gain at the same time. A certificate of deposit, is money deposited into a bank for a fixed period. During this time interest is earned. The money can only come out of the bank once the period is up. Early withdraw is likely to earn you a penalty fee.

CD's differ from general bank accounts because with a normal savings account you can withdraw money when you want to. The interest rate on a CD is also higher so the potential for gain is much higher too.

When you open a CD the bank will tell you how much you have to deposit. The more you deposit the more you will earn. When the account is set up, you will get a passbook and certificate of proof. Interest from the CD can be mailed or transferred to your account in some cases.

Understanding the gains of. CD will allow you to make the best possible decision when getting one.