Certificates of deposit (CDs) make financial sense for people of all ages who want a low-risk investment to park cash they don’t plan to use immediately. Maybe you want to use your cash to buy a car or make a down payment on a house pretty soon.
If you won’t need your cash reserve the day after tomorrow or next week, (or next few years) you’ll likely want that money to earn a better rate of return than your checking account offers—without taking on too much risk. This is when a CD is useful.
Two factors to consider when deciding whether a CD is right for you:
• Your time horizon. When will you need part or all of your cash? Do you have other cash resources to access in a pinch? If you have a sum of money and don’t expect you’ll need to use it for six months or longer, a CD may be ideal.
• Interest rates. The anticipated direction of interest rates will help you determine how long to tie up your money. If rates are rising (usually when inflation is on the rise), a short-term CD may be best. If rates are falling (usually when the economy is on a downswing), a longer-term CD may earn you more money, since you’ll lock in a higher rate.
PLAIN ENGLISH: What’s compounding? Put simply, it’s how your investment grows over time. Let’s say you invest $10,000 in a three-year CD earning 5% annually. In the first year, your $10,000 investment will earn $500. In the second year, 5% of the new total ($10,500) will be $525. In the third year, 5% of $11,025 will be about $551. The total amount of money grows each year, so the amount representing 5% of your investment also grows. That’s compounding.
There are many ways to invest and gain profit of your savings. Some riskier than others. Real Estate investments are second best after any CD account out there, as far as “secure investment” is concerned.
Buy a second home from Blue Coral our Florida Properties averages %30 return on initial deposit via VRM (Vacation Rental Management). Yes, you may read it again, % 30.
(* certain amount of min. down payment may be required, certain restrictions may apply – please contact us for detailed calculation, each investment property yields different rates)