An interest bearing account in which funds are deposited for a designated period of time. The interest rate is tiered, based on the account balance. Withdrawals are not allowed until maturity without a penalty.
Individuals with discretionary assets, particularly those seeking a higher rate of return without the risk of principal loss and interest rate fluctuations. Examples are professionals, dual-income households, and older individuals who are in a position to commit their funds for a specific length of time. Possible investment goals may include a child's education or retirement income.
- Amount and Term: The minimum amount for a Certificate of Deposit is $1,000. The length of term varies from 30 days to 5 years. Certificates under $10,000 are required to have at least a 90-day term.
- Interest: Certificates of Deposit earn interest which can be compounded, paid by check, or by crediting another account. This can be done monthly, quarterly, semi-annually, annually, or at maturity.
Rates for new and renewing certificates can change at any time and are determined by the amount and the term selected. Usually, higher interest is earned for larger balances. Interest rates are based on the market and are calculated on a 365 day basis.
- Additional Deposits: No additional deposits can be made except at time of renewal.
- Renewals: Certificates of Deposit may be either renewable or non-renewable. The customer has a 10-day grace period to withdraw all or part of the money. A renewable Certificate of Deposit will automatically renew at the rate of interest in effect at maturity.
- Non-Renewals: The customer will be contacted about re-investment opportunities.
- Earnings: An attractive interest rate is earned on the entire invested amount.
- Flexible: The customer may pick the exact maturity date to coincide with their investment needs.
- FDIC Insurance: The basic insured amount for a depositor is $250,000.00.