A certificate of deposit, or CD, accomplishes two things: it increases savings and incurs interest. The CD is one of the most valuable investment vehicles for those who are interested in a safe investment option with limited exposure to risks. CDs are one of the best options to diversify one’s investment portfolio strategy, and Bank of America is one of the leading banks offering flexible CD terms for their customers.
How does the typical CD work?
A CD is basically a loan to the bank. The one-time deposit is made, and the person agrees to not withdraw the funds from the account until a maturity date is reached. While the CD is held in the account, interest accrues. Once the term is reached, the investor can withdraw the total amount invested plus the interest that has accumulated. CD interest rates are sometimes much higher than rates offered with a typical savings account. Most CDs have either a variable or fixed interest rate attached. The most common type of CD carries a fixed rate, which means that the rates never changes while the CD is account is opened.
Why do people invest in CDs?
CDs are one of the safest ways to grow one’s money safely. The returns offered are guaranteed and the money is insured while held. As a part of a ladder or other investment strategy, individuals and businesses can invest in CDs and grow their savings. CDs require little knowledge beyond the APR and APY and are very straightforward.
Advantages of investing in CDs
• As a part of a long-term investment strategy, the returns on the investment can be great
• When leveraged properly, one can add their CDs into a laddering strategy, which increases access to cash flow
• The low risk investment requires no monitoring and is much easier to track
• Flexible terms and minimum amounts make it possible for people from all backgrounds to get in on the investment opportunity
• CDs are 100 percent backed by the FDIC
• Money can be withdrawn in emergency scenarios when there is no income or funds accessible
• CDs outperform money market accounts in interest accrued
• It’s one of the easiest ways to diversify a portfolio
Why choose Bank of America?
Choosing Bank America for one’s CD needs comes with its share of advantages. The penalty for withdrawal is waived within 6 days of the initiation of the term for the account. Partial withdrawal is also an option for new accountholders. Bank of America offers a broad range of term options with impressive interest rates for those considering this investment strategy.
Some options currently available to investors:
• Up to 179 days, .03 percent interest rate
• Up to 23 months, 05 percent interest rate
• Up to 35 months, 10 percent interest rate
• Up to 47 months, 12 percent interest rate
• Up to 120 months, 15 percent interest rate
What do Bank of America CD rates have to offer?
The most attractive option currently available is .08 percent for a CD with a minimum amount of .08 percent. This particular term lasts 12 months. Those who want to start off small can invest in a CD with $5,000 minimum upfront investment with a nine-month term.
CDs are a flexible, low risk investment vehicle for people interested in a safe way to grow their savings. Bank of America is one of the best institutions for CD investment opportunities because of their competitive rates and simple terms. Anyone who has ever wanted to explore options to improve their investment strategy can choose to incorporate CDs into their portfolio. As a part of a long-term strategy, investors can see solid returns over time if the term requirements are met.
