What You Need To Know About Opening a Certificate of Deposit (CD)
If you’re wondering how to be safe and smart with your investments, it’s time to consider opening a Certificate of Deposit (CD). While most customers understand the benefits of opening a savings account, one of the most frequent questions our team receives revolves around the specifics of opening a personal CD. At Legacy Bank, our team serves customers in Wichita, Colwich, and Pratt, Kansas, and is dedicated to helping customers select the right retirement or general savings vehicle. This is why we are detailing everything you need to know before applying for a personal CD. Learn more below!
How Does a Certificate of Deposit (CD) Work?
A certificate of deposit is an account that allows you to save money at a fixed interest rate for an established amount of time, which can vary from a few weeks to multiple years.
Since the 1960s, CDs have been a common method of modern investing for most Americans. Still, many customers have questions surrounding the details and functionality of CDs. In return for keeping your money in a certificate of deposit account, banks will offer a higher interest rate than a traditional savings account, and once the CD has matured, you can withdraw the funds or roll them over for a new term. However, a penalty may be imposed for an early withdrawal. At Legacy Bank, we offer a variety of terms from four (4) weeks to five (5) years, in addition to interest rates and minimum deposits.
An Example From Our Experts:
If you open a $10,000, 1-year CD with a 2.25% annual percentage yield, after a year, your account would be worth $10,225 as long as you keep interest payments in the account for the full CD term.
Benefits of a Personal CD
If you’re interested in meeting your savings goals and earning increased interest on your money, CDs can be a useful tool! They also have a variety of added benefits that many customers are unaware of. Some of these added benefits include:
- Multiple term options to choose from (four (4) weeks to five (5) years).
- Protected earnings are safe from market fluctuations and volatility.
- Competitive interest rates.
- Guaranteed returns—even if your bank drops the rates on savings accounts and new CDs, you will still enjoy the original, higher interest rate you opened with.
Choosing the Right CD Term
Unlike with traditional savings accounts, you will not be able to continuously add money to a CD, but instead, you will make a one-time deposit with a check, through a money transfer from your bank account, or using cash in person at your local branch. Our team encourages you to contact your local Legacy Bank branch to determine which term, interest rate, and minimum deposit can help you best meet your savings goals. Additionally, be sure to verify which documents are needed when opening a certificate of deposit account, as you will likely be required to provide the following information for security purposes:
- Address, phone number, and email address
- Social security number, date of birth, and identification
- Mother’s maiden name
- Employment status
- Funding for the new account (the account number and routing number of another bank account or a debit/credit card)
Earn Competitive Rates on a Personal CD
Obtain your best interest rate today! Call us at (316) 260-3711 or visit one of our locations today to get started.Click Here For More Information