How to Make Monthly Deposits to a CD

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All you need to make deposits to a certificate of deposit on a monthly basis is a CD that permits you to make deposits prior to its maturity date, funds for investing and the discipline to put money aside for your savings. It's a good idea to set up an online bank account to act as a holding account for these funds: You can deposit money throughout the month into the holding account, then make the transaction to add the funds to the CD once every 4 weeks.

Open a liquid CD account that permits monthly deposits. Check with your bank to see if they offer this product. Such institutions as Wachovia and NW Preferred Credit Union include liquid CDs in their portfolios (see Resources below). Examine the terms carefully--some liquid CDs permit withdrawals but not deposits, and others require minimum deposits in such amounts as $100 or $500.

Determine how much you want to save per month. A good rule of thumb for saving post-tax dollars is putting aside 10 percent of your paycheck each period. If you have to make a minimum deposit of $500 each time, you might need a second part-time job or to cut back on your spending to accumulate the extra money.

Set up automatic deductions from your checking or savings account to be added to the CD. This ensures that your deposit will be made every month.

Make the deposit yourself with a bank teller if your account balance fluctuates and it's too hard to predict if you will have enough to cover the automatic deduction every 4 weeks.

Deposit the money into the CD at an ATM if you can't do your banking during regular business hours. Use an ATM at your bank's branch to access your CD account.

Do your banking online. Log into your account and set up the deposit each time you are ready to add money to the CD. This gives you the convenience of making deposits anywhere that you can access a computer, but be careful not to expose your personal information.

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