What Is a CD Bank?

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A CD, or certificate of deposit, from a bank is a bond that matures at a set date with a fixed rate of interest that may be tied to the stock market. Purchase CDs from any bank by looking at different prices and considering advice from a financial consultant in this free video on money management and personal finance.

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

Do you have excess cash in your own bank account and wondered what to do with it? Hi this is Roger Groh with Groh Asset. Generally banks today will give you a number of options. You can buy stocks, you can buy bonds, you can probably buy a money market fund, you can stick it in the savings account, but also they will let you put it in a certificate of deposit or CD. So what is a CD? Well a CD is a bond that matures at some date up the road with a fixed rate of interest but some banks have tweaked that a little bit meaning they've also tied that to changes in the overall rate of the Standard & Poor's 500, in some cases they have tied that to the price of real estate, in some cases they have tied that to the price of commodities. Those might be called convertible CDs. Check with your bank. If you'd like to do a broader screen, you can go to Bloomberg.com and type in CD and a list of CD rates and prices will come up. Remember, your bank can buy a CD from anywhere, you just have to instruct them to do it. It pays to bid and look because prices are different and clearly you can increase your rate of return by doing a few minutes of homework. Hope that helps, I'm Roger Groh with Groh Asset and thank you very much for spending time with me.


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