Invest a Higher Principal, Extend the Maturity Period, and Get More From Your CD Investment!
It is easy to spend money, but very hard to pool them and invest on something profitable. That is why most successful businessmen and investors are well admired by millions of people—because they have that mental discipline with regards handling their finances. Mind you, this is not an easy thing to do. And that explains why few people reach financial freedom in their lifetime.
A certificate of deposit is just another time deposit that aims to use people’s invested money for funding businesses. When these businesses earn (like they usually do, since financial institutions rarely engage in unprofitable businesses), the initial amount that was pulled from the pool of investments will be returned and the revenue will be used to provide for the interest rates of the investors. That way, two things are achieved: the financial institution successfully gets a business going, and second is that the investors earn money from partaking in the venture.
Likewise, when you invest more in the venture, you will get more out of it. The revenue you earn is directly tantamount to the investment you give. A higher principal will then earn more monthly interests because the financial institutions gets more financial aid from you in terms of your invested money.
Consequently, it is also affected by the period of time you agree not to withdraw the money invested. Because one problem of banks is that they will never know when people would want to get their money. It is hardest to provide for the needs of clients when operating in a high liquidity set up such as in passbook and deposit accounts. At least with CDs, these companies can engage in business for a year or up to 5 years without panicking about lack of funds. And it is all the more rewarding for the investor if he sticks with the time deposit scheme of CDs because after the maturity, the lump sum will be given. This is the total amount of the investment made plus the monthly interests added—all tax free.
Doing these strategies will help investors maximize the benefits of their investments. When the investment is locked up for 5 years instead of 3 months, the interest will climb a notch higher. When the principal invested is larger, then there’s a large ROI as well. Jumbo CDs will work well for people who have disposable money right at their fingertips. These investments normally do not go down the level of 6–figure deposits in US dollars.
With both parties benefiting from this scheme, many investors find CDs profitable. After the period of maturity is achieved, the investor can either encash the amount or just roll it over and select another CD plan for the money. Investing it again for a period of time means that the lump sum will be entered into a CD contract again. Note that you can withdraw the amount, spend a portion of it for your needs and then reinvest what is left. That way, you get a taste of what you have earned all these 5 years of waiting.
With the Federal Deposit Insurance Corporation (FDIC) backing up the investment, there is no point of worrying about your precious investments. All you have to worry about is your next step in your investment plans—of whether to reinvest the money in another CD or to spend it in some other business venture. There are lots of ways that you can earn money without doing much hard labor. Invest in certificates of deposit and watch your money grow independently. Earn revenue even if you’re retired and just watching TV and playing with grandchildren all day long.
