Difference between bonds and cd's and which is best.?

Question

Long term investment and best percentages.

Answer 1

With cash deposits (CD), you put your money in a bank and you can have it back after the required notice if any.

With a bond you lend your money to a bank or other body for a certain fixed period of time, from 1 year upwards. The interest is usually about 1% higher than for a CD, but it depends on the number of years and the financial strength of the institution.

There also bonds issued by the government eg Treasury bonds and Municipal bonds, corporate (industry) bonds, foreign  bonds etc. etc. It is a big subject.

In  all investments the return you can expect  is proprtional to the risk of not getting it and to the time your money is tied up

There you are, all about investing in one short, essy, lesson.!

Answer 2

Ok. A cd is an account that you open for a term of your choice. they range from 3 months to 5 years. If you closed the cd before  the maturity date you have to pay a penalty. You can shop around from bank to bank to see which has a higher rate. A 12 month Cd at one bank can pay 4.25%interest, and at a different bank right across the street thay can be paying 5.00%. When the cd matures you have the option of closing the cd and take your money or renewing the cd for another term.  

A savings bond you buy and you have to wait a certain amout of years to be able to cash it in and they have a set

percentage. Cd rates go up and down. You can put as much money as you want in a Cd. Savings bonds come in set denominations like dollar bills. So if you buy a $100 savings bond for $50, in about 10 years it could be worth about $147 so you made about $97.  Go with the CD. Shop around.