Certificates of Deposits (CDs)
What is a CD?
CDs are a common fixed-income investment where you can typically earn a higher interest rate than savings accounts or money market accounts.
How do CDs work?
You invest a fixed amount into the CD, for a predetermined amount of time (determined by you). In return, you are guaranteed to get the original amount of money you invested, plus interest.
Although CDs are guaranteed to earn you interest, there are some stipulations. You aren’t able to access that money for the amount of the CD term (you can withdraw your interest payments without penalty).
When the CD term expires, you can cash out the money or roll over the money into another CD. It all depends on what your needs are. If you cash out, you could add that money to your checking or savings account to increase your retirement nest egg.
What are the advantages of a CD from Principal Bank?
- Some of the most competitive guaranteed interest rates in the industry
- Peace-of-mind because deposits are insured by the FDIC to a maximum of $100,000 for each depositor
- Monthly compounding to help your money grow faster
- Flexibility to choose the CD maturity date with terms ranging from 3 months to 5 years
