Earning Money

Commonly called a CD, a Certificate of Deposit is a form of investing your money for a greater return on your money in comparison to a savings account. It, like a savings account, is entirely insured by whatever bank you get it out of, so it is commonly called “money in the bank.” It’s a no risk profit, that’s for sure. The only real difference between this and a savings account is that the certificate deposit has a specific, fixed term in which the money cannot be touched. That means that if you take a CD out for three months, that money in untouchable for three full months. Get it out for a year, that money is untouchable for an entire year.

So, why would you want to A) put money into a CD where you can’t touch it and B) not invest it into something else like stock? I’ll answer part A first and then go to part B. You want to put money into a CD (or even an IRA, but that’s a CD to the extreme) because the interest you can earn is higher than it would be for a savings account. Let us assume, for example, that you have five hundred dollars that you saved up from a job that you got during winter break (between first and second semester). And, you’re getting a summer job as well, so money won’t be a problem. Why keep that money in a savings account when you’re bound not to touch it when you can take it and invest it in a CD? Make a little profit on it. By investing it into a CD, you have untouchable money that you wouldn’t have touched anyways, you can earn an increase in profit than you would by having it in a savings account.

The next question that you may ask is why would you want to invest in a CD rather than in something a lot more profitable than the stock market. The stock market has made people millions of dollars, but CDs don’t exactly make that much. Why would people want to invest money in something they can’t touch when they can make more money investing it in something they have complete control of? There is no risk involved in getting a CD which is not like playing the stock market. In that, you can lose all of your money and that’s that. There is no risk when investing in a CD. Although there is not as much profit, it’s good for that person that wants to invest a little money and forget about it for a time.

So, where can you get a CD? Go to your local bank or credit union and ask about making one. Now, for credit unions (in my experience), the more money that you invest, the higher the interest. The same goes for the amount of time. You might get 4% if you invest 500 bucks for three months, but you’ll get 4.5% if you invest 1000 bucks for three months, make sense? Getting a certificate of deposit is good for the kind of person that has money they just want to let gather interest. You’re not going to make millions, but for money you have no intention on spending, it’s better to get 4% rather than 1 or 2%. If you’ve got some extra money, go save it in your bank by getting a CD. Good luck.

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