ETFs & Funds
Home›ETFs & Funds›Fund Industry›12 types of CDs offer safer returns, but terms and pen…
12 types of CDs offer safer returns, but terms and penalties vary
High-yield CDs can provide competitive rates, and deposits are typically protected up to $250,000 per depositor per institution at federally insured banks and credit unions.
Yahoo Finance outlines 12 certificate of deposit options, noting that CDs can be a relatively safe way to store savings, often with rates that are higher than traditional savings accounts.
The outlet explains that a traditional CD works by depositing money with a bank or credit union and agreeing not to withdraw it for a set term, in exchange for a fixed interest rate. It adds that early withdrawal from a traditional CD generally triggers an early withdrawal penalty that can offset or potentially wipe out earned interest.
Yahoo Finance also describes high-yield CDs as offering competitive rates compared with the national average, which are often available through online banks but may also be offered by some brick-and-mortar banks and credit unions. It says these typically come with fixed interest rates, set terms, and early withdrawal penalty clauses, and that deposits are protected up to $250,000 per depositor per institution when held at federally insured financial institutions.