Short term CD – your path to long term savings

Talk investments and what usually comes to mind is huge money, a long waiting period and an attractive rate of interest. This is only a one sided view of investments. In our day to day life we will come across the need to save even for short periods of time. Putting money locked in an account for a short period will help you save for short term commitments. It is these short term commitments that help you plan your future which in turn shapes into long term commitments. So short term CDs are not a bad option at all!

The best part about short term CD is that your money is locked in the account for a short period of time. So while you have the luxury of seeing your money grow on one end, you have the security of having the finances well within your reach in case of emergencies. This will save you the laborious effort on applying for loans.

Many people get put off by the fact that short term CDs offer lesser interest rates. This is just a small part of a bigger picture. They offer lesser interest rates simply because they are locked in for shorter periods and are not subject to any risks during this period which is usually the case when you expect big returns. Usually higher CD rates are associated with a long waiting period which may not be acceptable always.

There are many financial institutions offering short term CDs today. This means that you have many options when it comes to interest rates too. You will have to take time to explore on this before you decide on where you want to purchase a CD. Also, there are some financial institutions which encourage people to invest in short term CDs assuring them high interest rates. You can get to know about these through the internet or through networking among friends.

There are many websites that update the CD rates on a daily basis depending on the fluctuations in the market. This can be an indication to you on which is the best time to invest in the short term CD. Duration for short term CDs can range from 7 days to as much as 6 months. All you have to do is prepare your plan before deciding on the convenient plan for you.

The good news is that you can purchase Short term CD online. This method will save you a lot of time and effort. While opting for this, you must ensure that you are completely sure about the financial institution that you are transacting with. There have been cases where people have blindly invested their money considering high interest rates and have lost their money to fraudsters. To make the best of your money, transact with well established organizations that have earned a good reputation among the people. Many online forums and interacting with your family and friends will give you fair amount of idea on where you want your funds to be invested.

Short term savings are a stepping stone on which your long term plans can be based. You can start small, but starting is what matters more.