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Are you leaving money on the table?

How much interest are you earning on the cash in your savings account? If you don’t have a certificate of deposit in your savings strategy, you may be missing out on an opportunity to maximize your interest earnings.

Certificates of Deposits, or CDs, are a type of FDIC insured savings account that currently offer a higher interest rate -- hovering around 5% --than standard savings accounts. However, CDs require that funds invested in them remain in place for a contracted amount of time. The best rates are offered on short-term CDs ranging from three months to one year. CDs may be purchased in increments of $1,000. You are charged a penalty if you access your funds before the end of the contracted period.

Some investors ladder their CDs to take advantage of the locked-in rates. An example of this cycling technique is investing in CDs that mature at three different time periods, such as three months, six months and one year.

Like traditional bank savings accounts, CDs are insured for up to $250,000 and are a highly safe investment. Your advisers at Waypoint Financial have access to CDs with the highest current rates at banks and savings institutions across the country, while they last. Northwestern Mutual offers several CD options including interest bearing fixed1, interest bearing variable, inflation-indexed, and Zero Coupon1, so you can find the one that works with your financial plan. Keep in mind, CDs are interest rate-sensitive, they don't come without risk (credit, liquidity, and call risks, for example) and you could lose money if you do not hold them until maturity.

1These investments are sold in the secondary market. The secondary market for long-term CDs may be limited. You should not rely on the possible existence of a secondary market for any benefits, including achieving trading profits, limiting trading or other losses, realizing income prior to maturity or avoiding early withdrawal penalties. If sold prior to the maturity or call date, they are subject to price fluctuations and may be worth less than their original cost.


If you are interested in maximizing your savings earnings with CDs, contact Zach Schmidt today at Waypoint Wealth Management, 406-522-4760.