How to Buy CDs Through Discover

CDs have higher returns on investments than traditional savings.

Certificates of Deposit or CDs, are used as a safer investment strategy than stocks and bonds. Money is deposited into an account for a specified duration. The bank pays higher interest on these deposits because they borrow the money from you for other investments.

Deposit Amount

Decide how much you can invest. In order to get the full benefit of a certificate of deposit, you must leave it alone for the duration of the term you've agreed to. Invest money that you don't need right away.

Deposit Term

Choose a term. Discover Bank has term choices available from 3 months to 10 years. The longer the term duration the higher the interest rate and annual percentage yield. Early withdrawal will result in a penalty loss of 3 to 9 months of interest on the amount you withdraw depending on your term.

Application Process

Apply online by choosing a username and password. You'll complete your address information and the complete the purchase of the CD. If you're more comfortable with an agent, call and speak with a customer service representative to walk you through the process. Deposits can be made online, but you will be sent physical forms to agree to and sign.

References

• Discover Bank; CD Accounts
• Tips & Advice; Get the FAQs on CDs

Resources

• "Personal Finance for Dummies"; Eric Tyson, 2006
• "The Ernst & Young Tax Guide 2008"; Peter W. Bernstein; 2007