Basics of the Certificate of Deposit

What is a certificate of deposit? The first thing you must know is a certificate of deposit is a bank term for a time deposit. There are different ways for you to deposit in the bank, and one of the ways for your money to have interest is to put it under a certificate of deposit. Like most accounts, you have to remember that there are different minimum deposits and withdrawal, and this also applies for a certificate of deposit.

What is a certificate of deposit minimum fee? The minimum fee for a certificate of deposit can go as high as $10,000, but this depends on the type of bank. Some may offer this at a lower rate, but all certificate of deposit accounts have maturity dates where you can only withdraw from at specific times of the year. This allows the bank to process your interest rates at these specific times. Otherwise, if you withdraw from the account at a premature date, you will be penalized of no interest for several months at a time. This means you won’t be able to get any interest despite the upcoming supposed interest for your account. This protects the bank’s interests, as well as their investments. Aside from this protects the interest of the bank, it also protects the interest of the depositor, making sure that the person gets his deposit’s worth at the right time.

There are different benefits the longer that you have a certificate of deposit. Depending on how long you’ve had your certificate of deposit, you will be able to increase your interest rates with the bank, and you can avail of other benefits as well. There are different requirements for you to be able to benefit from this so make sure to ask from your bank on what is a certificate of deposit.

Be Wise with Money

Be wise with money and get to know how you can earn more by knowing what is a certificate of deposit.


Nowadays that the prices of almost all products and services are going up we must learn how to handle our finances intelligently. Most people think that saving money in the bank is the best way to do it. Saving money in the bank will help you improve your finances, but you an absolutely do more than that. The first thing you have to do is know what is a certificate of deposit.



A certificate of deposit is a form of investment. It is a time deposit that restricts the holder from withdrawing their deposited money for a given period. It does not mean that you cannot withdraw your money anymore but withdrawing it before the agreed upon term is fulfilled will result into a penalty. The term would normally range from six months up to five years. Being able to keep your money safe in the bank up until the end of the term, will allow you to earn middle up to high interest rate.



Now that you already know what is a certificate of deposit, the next thing you have to understand is how it works. It is different from a regular savings account because it has a fixed term and a fixed interest rate. It is set up to be kept in the bank until the end of the term before it can be withdrawn together with the accumulated interest. A certificate of deposit may also require minimum amount of deposit. The higher the principal deposit is, the higher the interest rate.



Knowing and understanding what is a certificate of deposit will give you more ideas on its benefits and its earning opportunities. This is a smart way of being in charge of your finances.

Know How It Can Increase Your Money

If you want to earn considerable amount of interest in your money deposited in the bank, then you have to know what is a certificate of deposit. That is right; you can earn interest by just depositing and keeping your money in the bank for a given period of time.



Do not worry if you are not familiar with financial trends and term because it is easy to understand what is a certificate of deposit. The first thing that you have to know about certificate of deposit is that it’s an investment. It is a time deposit which means that you have to deposit and keep you money in the bank for a specific period. The term for it would range from six months up to five years in average. Because it is a time deposit, it restricts holders from withdrawing their money before the maturity date. Withdrawing the money is still possible, but if done before the agreed upon term the action will result to a penalty. On the other hand being able to keep the money safe in the bank up until the term agreed upon is fulfilled, will allow the holder to earn middle to high interest rates.



No need to doubt what is a certificate of deposit because the bank that you will transacting with is either covered by the Federal Department of Insurance Corporation also known as FDIC or if you are transacting with a credit union then it must be covered by National Credit Union Administration or NCUA, for a more secure investment.



Knowing what is a certificate of deposit will allow you to do two things to increase your money. You don’t only get to save your earned money in the bank; you also get to earn good amount of interest from it.

Certificate of Deposit Definition: Terms and Conditions

What is a certificate of deposit and what are the terms and conditions? There are different terms and conditions depending on the bank that provides the certificate of deposit. The bank may be able to close the account before the term ends, and this depends or the violation or neglected requirements the account holder may have had. The bank can also pay the interest to the account holder as soon as the interest is there, but it can also accumulate in the account as the account stays in the bank longer. Depending on the bank, there can be different times of calculating the interest rate, whether beginning that the first month of deposit or on the following month.



The bank also has the right to delay withdrawals from the bank for security reasons. Remember to ask you bank for their reasons, and more often than not, they will oblige these types of questions. More often than not, they delay withdrawals depending on the type of withdrawal and if it would risk them a bank run. This all depends on their definition of what is a certificate of deposit and what their conditions are.



Different types of withdrawals will have different restrictions and terms, like withdrawal of if principal deposit, withdrawal of interest and early withdrawal. Usually, the withdrawal of principal deposit would entail the closure of your certificate of deposit while the withdrawal of interest will have to be calculated which months are inclusive for the withdrawal from the account. However, premature withdrawal from your certificate of deposit will cost you a penalty form the bank, which can be a deduction of interest or the bank’s cost of having the money, replaced.



It is the bank’s obligation, however, to inform the holder of the certificate of deposit account about the automatic rollover at the maturity of your certificate of deposit. However, some banks don’t do this so it’s best that you more of what is a certificate of deposit automatic rollover so you know what to expect at maturity date.