If you're looking for an investment that protects your principle while giving you a higher return than traditional savings accounts, Certificates of Deposit (CDs) are a smart option. They are FDIC insured which means that your money is protected by the US Government up to $100,000. To help you decide whether a short-, medium- or long-term CD is right for you, compare your test score to the chart below.
CERTIFICATE OF DEPOSIT CHART
If Your CD Test Score is...
Under 70 points:
You need a lot of liquidity, so a CD may not be right for you. Keep accumulating money in an investment savings account, like a money market account.
70 to 80 points:
You need some liquidity, but you can afford to lock your money in for a short period of time. Choose a short-term CD that matures in 7 days to 12 months, and match the maturity date to your needs.
85 to 95 points:
You will probably require access to your funds within the next 12 to 24 months. Select a medium-term CD that matures in 1 to 2 years, and match the maturity date to your needs.
100 points or more:
You can afford to take advantage of the higher interest rates a long-term CD yields. Consider a CD that matures in 2 to 10 years, and match the maturity date to your needs.
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On October 3, 2008, President George W. Bush signed the Emergency Economic Stabilization Act of 2008, which temporarily raises the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. The temporary increase in deposit insurance coverage became effective immediately upon the President's signature. The legislation provides that the basic deposit insurance limit will return to $100,000 on December 31, 2009.
The bank has chosen not to participate in the FDIC’s Transaction Account Guarantee Program. Customers of the bank with noninterest bearing transaction accounts will continue to be insured through December 31, 2009 for up to $250,000 under the FDIC’s general deposit insurance rules.
