No, not a CD like what you used to listen to music from - A CD is also a financial term meaning, a certificate of deposit. Similar to a savings account, a CD is a great way to increase your savings without the risk of losing your money in the stock market. To open a CD, you need to first, find out the minimum amount and decide how much you want to deposit. Next, pick a term, or the amount of time your money will be held in the CD. A term can be 6 month or even 5 years! Normally, a CD will have a better interest rate than a regular savings account, this way you have potential to earn more money! The reason a CD has a higher interest rate is because your money has to stay in the CD until the end of the term. That’s important to know, because you if you’re going to need access to your money, then a CD might not be your best option at the moment.
For more information about CD’s and why they are a great way to save more money, email me your questions or check out what Michigan First has to say about them.
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