Series 66: 2.4.17.6 Certificates Of Deposit (CDs)

2.4.17.6  Certificates of Deposit (CDs)

Certificates of deposit allow bank, savings and loan, and credit union customers to receive higher interest on their deposits than they would with a savings or checking account. To obtain the higher returns, customers must be willing to tie their money up for a fixed period, typically one month to five years. The longer the term, the higher the interest rate offered. If a customer wishes to withdraw money early, he will pay an “early withdrawal” penalty and forfeit some of his interest. Bank CDs are issued by a bank and offer up to $250,000 of FDIC protection. They are not considered securities. Bank CDs typic