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How do I set up a Certificate of Deposit account?
A: Certificates of Deposit (CDs) can be a great financial tool for investors looking to increase their fixed income or add to existing savings. The following steps can help you get started with setting up an account.
- Decide your preferred CD term. Nail down the amount of time you want to leave your funds in a CD. You can be penalized for withdrawing money early, so stick to a timeframe that will work long term.
- Choose the frequency of your interest payment. Many financial institutions let you choose how often you’ll collect interest payments on the CD. Keep in mind the option of reinvesting the payment into the CD to compound interest.
- Create and fund your account. Similar to a savings or checking account, you’ll need to set up your CD with the bank or credit union of your choice then fund it by online transfer or check.
Doing a little research can go a long way in helping you feel prepared to open your first CD account. Education Credit Union, which serves Amarillo, Bushland and Canyon, Texas, provides a complete list of rates, terms, and payment frequencies to help potential investors select the best option for their financial goals.