Enjoy Flexibility with Trade Up and Step Up Certificates Of Deposit

The certificate of deposit is a means to invest in a risk free environment while getting the maximum returns from it. The returns will always be higher than a savings account, but the only difference is that in a savings account you will have access to your money whereas once you have invested in a certificate of deposit; you cannot get access to your money without accruing penalties for the same. 

The problem with a certificate of deposit is that the interest rate remains constant for the entire period during which you stay invested. There are a number of special CD’s which offer a lot of flexibility while providing the same risk free environment which has made CD’s such an attractive investment option. 

The step up Certificate of deposit is one such investment. This sort of CD will provide you a guaranteed increase in the rate of return for every certain months. The increase in interest rate will depend on the amount you have deposited and also the term that you want to stay deposited. There are also step down certificates which will reduce the interest rate after a certain period. The control over stepping up or down is not in the hands of the people who invest, but rather the bank or financial institution which issues the certificate. 

Another type of variable or flexible certificate is the trade up certificate of deposit. here, the person who invests the money has control over when he or she wants to trade up or bump up the interest rate. That is, you get to alter the interest rate of the certificate once or twice depending on the terms of the agreement, during the period that you stay invested. The time can be of your choosing. It is up to you to alter the interest rate at the exact time when you feel that the market interest rates have peaked. One needs to have a sound sense of global financial markets in order to understand when a certain market will peak or fall. This way you can take maximum benefit out of a market which has peaked at a certain time. But if the market keeps falling, you will just have to stay satisfied with the current interest rate. But do be aware that certain CD’s will force you to make a bump even when the market is down, hence it is important that you read and understand the terms and conditions thoroughly. 

There are many other flexible certificates available which can suit individual investors according to their needs and aspirations. There are certificates which allow you to sell them to a third person at whatever rate you desire. These are called broker certificates. There are those which allow you to add on money during the term. This way you can treat it like a savings account by investing more as and when you receive surplus cash. There are also those that allow you to make withdrawals at certain periods of time without incurring any penalty.

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1 YEAR
CERTIFICATE OF DEPOSIT

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ONLINE SAVINGS ACCOUNT

  • No minimum balance
  • Competitive rates, No risk

MONEY MARKET ACCOUNT

  • High rates, Access to money
  • FDIC Insured