Question:

How long does money have to be in CD savings account?

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is it good?

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  1. at least five years for the ones i got.

    better interest than if left in savings.


  2. It depends on the terms offered at the time you open your CD.  Generally speaking, the longer the term, the higher the interest rate, but there are exceptions.

    Sometimes a financial institution will offer an odd term, such as 11 or 13 months with a promo rate that could be higher than CDs with longer terms.  The unusual terms are so that existing CDs that other depositors have don't automatically roll into the promo CD at the higher rate.

    Other times, there is such a thing called an inverted yield market in which longer terms command lower interest rates than shorter terms.  But this is not a common situation.

    CDs are good if you don't need the funds right away.  Otherwise, if you withdraw before the maturity date, there can be a penalty that will cause you to lose some or all of the interest you have earned.

    And, be sure not to exceed $100,000 so that you are covered by federal deposit insurance.  There are ways to increase that coverage, by adding eligible payable-on-death beneficiaries, but that is another topic.

  3. There are different lengths of time for CDs. You can get them as short as 3 or 6 months or as long as 5 years or more. You can't take the money out before the CD time is over without a big penalty. Interest rates are kind of low right now, so CD rates are low. I would not get a CD for longer than 1 year right now. Be careful - many CDs renew automatically for the same term unless you cash them in right as the term is up.  

  4. I've seen CD rates for as short as three months but the longer you hold your money in a CD, the better the rate gets. Put the money in as long as you think you can before you will need it.

  5. It depends. They vary from 6 mths to however many years you need one for. The longer the CD period the higher the interest rate. You can check out CD offers from your bank online or go to your local bank and they will explain how it works. From what penalties they are for early withdrawals and how long you have after your CD matures to withdraw it or renew it and minimum amount to open one.

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