How to Apply For CD Rates

In this tough economy, it's sometimes hard to invest into the stock market because you're not guaranteed a return. Instead of being skeptical on your returns, you should really look into a CD rate or otherwise known as a certificate of deposit. Unlike the stock market, CDs are a guaranteed return. Let me show you how you can compare CD rates the easy way.

Understand what a CD does - If you're unfamiliar with a CD, you should do a little research first but I give you a quick cliff note version. You'll basically set aside x amount of dollars. Let's say you want to invest $10,000. The next thing you'll want to do is figure out how long you'll want to invest your money. You can tie your money from 3 months to 10 years. Generally, the longer you let the bank hold it, the better the rate you're going to get. So, let's say as of today, you want to have your money held for 1 year at 5%. At the end of the year, you can withdrawal your money and you'll now have $10,500. Remember, once you have the money in a CD, you can't withdrawal it without being penalized.

Figure out what you want - The next thing you'll want to do is hop online and see what kind of rate you're going to want. Once you know what length you want, you can check out the rates online. Generally, an online bank will usually give you a better rate than a local bank. It' s key that you do your research. The more money you have to invest, the better the rate usually is. Sometimes, this isn't the case. As long as you have about $500, you should be safe to get a decent rate.

Apply for the CD - Once you find a CD, you're going to want to apply with the bank. Opening a CD is just like opening up a checking account, etc. They will want your personal information and some evidence to prove that it's you. Anything such as a cell phone bill, etc will do. Once you open up your account, you'll be able to access it online and you can track your progress. It's always fun to watch your money grow!

Wait for it to mature - As long as you don't withdrawal your money early, you're not going to risk being penalized. If you know you're going to need that money, it's probably wise that you apply for a money market account, where you won't have your money tied up. Instead, you'll get a slightly smaller interest rate but you'll still make money on your money.

CD rates are great for those that don't want to worry about their return. You can really spot some great rates out there if you do your research and keep up with the news. As long as you do this, you can really make a lot without having to lose sleep at night! Be sure to do your research and the great rates will come.

Find current cd rates and more of Tom's work at GOtalkmoney.com.