About Certificate of Deposit Rates

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Interest rates on certificates of deposit will range between 1 percent and 3 percent depending on the length of time of the deposit and the stock market. Understand the terms of CD early withdraw with advice from an investment consultant in this free video on investments.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

Hello, my name is Roger Groh. We're here to talk about certificates of deposit and the interest rates that they pay you. A certificate of deposit is cash that you've given to a bank for a specific time period, for 30 days, 60 days, 90 days, a year, 2 years, whatever it might be, whatever the dates are that you picked. And then the interest rates that that bank is going to pay to you during that period. Today according to Bloomberg.com, the range is between 1 and 3% depending upon the length that you're going to leave your cash in that bank. Now there's some tricks when it comes to this. Number one, some banks will let you out of your certificates of deposit early and the issue is do you forfeit your interest or do you keep it? Something very carefully to check on. The other thing is you're not obligated only to invest here in the United States, you can invest your money in Mexico or you can invest your money in Hong Kong or you can invest your money in England or you can invest your money in Switzerland, whatever it is that you choose. Interest rates are going to differ substantially between each country and the risk will change substantially in each country. Now there's even one more thing to think about, within certificates of deposit, you can also tie your interest rate to whether the stock market goes up and down. Where you will get a minimum rate of interest in some cases, but you might make more if the stock market goes up. Maybe that's not such a bad thing with the stock market being down substantially today as long as the interest rate is not substantially less than what you would of ordinary received. I'm Roger Groh and that's a little bit about interest rates on certificates of deposit.


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