BANKING AFFAIRS

Detailed explanation-1: -A Certificate of Deposit (CD) is a money market instrument which is issued in a dematerialised form against funds deposited in a bank for a specific period. What is the difference between CD and FD? With a maximum tenure of 12 months, CDs allow you to invest your money for a limited period of time.

Detailed explanation-2: -A 1-year CD, or certificate of deposit, is a type of savings account that keeps money locked up for 12 months at a fixed rate. (You can find even shorter terms, such as six-month CDs.)

Detailed explanation-3: -At the end of the 24 month (two year) period, the CD will “mature, ” and the investor can withdraw the funds or renew the CD for another 2 year term. While these cd lengths can be a great option for many investors, they may not work for everyone.

Detailed explanation-4: -An 18-month CD is a relatively short-term investment. While your money is locked up for a year and a half, you’ll have access to it-plus interest-when the term expires. When comparing your savings options, it’s important to take into account liquidity as well as yield.

Detailed explanation-5: -A three-year CD is a deposit account in which you agree to keep the money in the account for three years. Yields on three-year CDs are often higher than money market account and savings account yields. Bankrate’s calculator can help you determine how much interest you could earn when your CD matures.