Earn a great return without the risk of stocks
Learn more about our commercial CDs below. Or, if you’re interested in opening a CD today, connect with our team.
What is a commercial certificate of deposit?
A certificate of deposit, or CD, is a low-risk, high-yield savings account. When you open a CD, you commit to depositing an amount of money for a set period of time (called a “term”). During this term, earn interest on the amount of money deposited. At TFNB, term lengths vary from a month to 5 years. CDs with a longer term come with higher interest rates. That means that the longer you leave your money with us, the faster it will accumulate interest. Interest rates are also locked in once you open a CD, so you earn at the same rate for the entirety of the term. Additionally, CDs are insured by the FDIC for up to $250,000.
It’s important to note that CDs offer less liquidity than traditional savings accounts. CDs usually have penalties for withdrawing money before the term is over. The benefit is they have higher interest rates.
When is a certificate of deposit right for my business?
Since CDs are less liquid, it is smart to figure out when a CD is good for your company. Here are some examples of when it could be a good idea for your company to open a CD.
When you are looking for a low-risk way to accumulate savings. There is very little risk when you deposit into a CD. The Federal Deposit Insurance Corporation (FDIC) ensures CDs just like savings or checking accounts. This means the government guarantees you won’t lose your deposit or earned interest (up to $250,000). While CDs have lower interest rates than some investments, they have less risk.
When you won’t need your money soon. That money you know you don’t need in the next few years may be better off in a CD. It can earn higher interest rates there than a traditional savings account. If you have large expenses coming up, a savings account (which is easier to access) may be a better option.
When you want more money later. Start preparing for future purchases today by putting some of your funds into a CD. Grow your nest egg faster in a CD. As an added benefit, storing your money in a CD protects it. The stricter access rules of a CD can keep you from spending money you want to save.
When interest rates are high. If CD interest rates are higher than their historical average, take advantage of it. Remember, interest rates are fixed on the day of deposit. You will continue to earn at high rates even if rates drop over the term of your CD. View our current interest rates here.
Is now the right time to open up a CD? Contact a commercial banking expert at TFNB today!. Find out why so many Central Texas businesses have chosen us as their bank for life.
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