If you’re looking for a guaranteed ROI on your hard-earned money without the risk, a Certificate of Deposit (CD) may be the perfect solution. Unsure what that entails or whether it’s the right for you? Our financial experts have outlined the pros and cons of CDs in this article, so read on to learn more. 


Defining CDs—Here’s What You Need to Know.

In banking terminology, a CD is a Certificate of Deposit, which pays a fixed interest rate within a fixed term.  Essentially, you put a set amount of money into the CD, leave it in within the agreed-upon time, and when it matures, you get your money back plus the interest on the CD. That is if you don’t withdraw the money early, which would incur a penalty. Terms run anywhere between 3 months to 5 years in length. 


Why CDs over Other Investments: Turning Savings into Certainty

Imagine this: You’ve been diligently saving for a down payment on your first home. But with interest rates fluctuating and the stock market uncertain, you’re not sure where to park your money safely.

Instead of leaving it in a low-interest savings account that only earns half the amount in interest, you secure a TFNB CD with a competitive fixed rate. Your money earns more interest than a typical personal savings account, and when the CD matures, you have the amount you planned for—plus the added interest. 

That’s the power of a CD: stability, predictability, and growth without the guesswork.


Pros & Cons of CD Investing: Is It Right for You?

CDs are one of the safest ways to grow your savings, but they also have some limitations. Here’s a breakdown of the benefits and potential drawbacks so you can decide if a CD is right for you.


Pros of CDs

Fixed, Predictable Returns – Lock in a guaranteed interest rate, so you always know how much you’ll earn. Unlike the stock market, you won’t lose money if the market fluctuates. 

Higher Interest Than Regular Savings – CD rates often exceed those of traditional savings accounts.

FDIC Insured – With participating FDIC Insured banks, your deposit is protected up to $250,000 per tax ID number, ensuring zero risk of losing money. And for deposits over $250,000, you can access multi-million dollar FDIC insurance and earn interest, all through our IntraFi® Network.

Encourages Disciplined Saving – Since your money is locked in within a set period, you’re less tempted to pull it out and spend it impulsively.

Multiple Term Options – Choose from short-term CDs (as little as 30 days) or long-term CDs (up to 60 months) to match your savings goals. 

CD Laddering for Flexibility – Stagger multiple CDs to maximize returns while maintaining access to funds. 

Use as Collateral – Your CD account can serve as collateral, giving you the flexibility to borrow against it when needed.


Cons of CDs

Limited Liquidity – You can’t access your money early without paying a penalty (unless you choose a no-penalty CD).

Fixed Interest Rates – If rates rise after you open a CD, you miss out on higher returns.

Inflation Risk – If inflation increases, the purchasing power of your savings may decrease over time.

Potential for Automatic Renewals – If you don’t track your CD’s maturity date, your bank may automatically renew it—possibly at a lower rate—locking you into a new term.

CDs aren’t for everyone, but they’re an excellent option for those who value security and guaranteed returns. 

 

Why TFNB? The Best Choice for CDs in Central Texas

Not all CDs are created equal. While many banks offer CDs, TFNB goes beyond just good rates. We provide a full-service customer experience to help you make the most of your savings. 


Competitive Rates for Maximum Growth

We offer some of the best CD rates in Waco and Central Texas, ensuring your money works harder for you.


Flexible Terms to Match Your Goals

Choose from short-term or long-term CDs—whether you’re saving for a car in six months or retirement in five years.


Local Expertise & Personalized Guidance

At TFNB, you’re more than just an account number. Our team takes the time to understand your financial goals and guide you toward the best savings strategy.


Trusted, Secure and FDIC-Insured

Every deposit is FDIC-insured up to $250,000, and for amounts over $250,000, the IntraFi® Network ensures your funds remain fully protected—giving you complete peace of mind.


A Bank That Gives Back

By choosing TFNB, you’re supporting a bank that’s deeply rooted in the Waco community, investing in local businesses, non-profits and events. When you partner with us for your financial needs, you’re partnering with your local community. 

 

Ready to Grow Your Savings? Here’s How to Get Started

When you’re ready to watch your money grow with guaranteed returns, visit with one of our friendly bankers today. They are always ready to help guide you to the right financial solutions and find the right CD for your savings goals. 

Visit us online or at your nearest TFNB branch today.