This time of the year we need to SAVE a lot because we had greater plans in the future. Besides living frugally, Certificates of deposit, or cds, can be a great way to save money and receive a guaranteed return. CDs often receive a higher rate of interest than ordinary savings accounts, because they require leaving the money in the bank for a set amount of time. We either open a CD account at a bank we already use, or shop around to get the best rate.

First we need to find out what the minimum balance is for opening a CD account. I think at this moment we don’t have enough to open a CD yet so we better start putting aside money in a regular savings account until we have enough. I heard from my uncle that some banks offer higher interest rates for jumbo CDs, or those with at least a certain amount of money.

A friend suggested that we need to compare the interest rates for various CDs. Most CDs mature in 6 months to 3 years, although some may be only 3 months, or more than 5 years. Longer term CDs generally offer higher interest rates than short term CDs.

We have to make sure if the financial institution that offers the CD is federally insured, meaning that we’re guaranteed to get our money back.

Do you have any experience on opening your own CD account? We would like to hear any suggestions from you to ensure that we’ll be making a right decision on investing our money on CDs.