Safe Saving – All about Certificate of Deposits


Saving for a rainy day sounds like a great idea. You may have even resolved to do just that as part of your plan for 2015! Keeping with our theme of fiscal responsibility, Wallkill Valley Federal Savings & Loan, wants to help our community reach their financial goals. We started our discussion by defining various types of deposit accounts. Today we will focus on saving, specifically, saving with Certificates of Deposits.

What is a CD?

In case you missed it, we defined CDs, or Certificates of Deposit, as: A termed savings account that brings a higher yield than a traditional savings account. Basically, when you open a CD, you will be putting your money away for a defined period of time for a guaranteed rate of interest. The terms can vary, anywhere from 1 month to 5 years.

The Good

The benefit of a CD is that the rates are often higher than a typical savings or money market account and tend to increase as the length of the term increases. CDs are also considered low risk because they have a predictable rate of return. CDs are also insured by the FDIC.

The not so Good

The down side is that you will not have easy access to your cash during that time frame and will face stiff penalties for early withdrawal. Additionally, there may be requirements for the minimum deposit amount, certainly more than your run of the mill savings account.

If you have some extra cash and you need a place to put it for a short time, then a CD becomes a very nice financial tool!

Still have questions about the various types of savings accounts and how they can help you reach your financial goals? Please get in touch with us. We have a variety of CD products available and our staff would be happy to talk you through any questions you may have and help direct you to the right place for your money!