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A certificate of deposit or CD is a sort of a bank time deposit. Commercials banks usually issue this kind of deposit though they too could be acquired from brokers. This kind of deposit can only be withdrawn on a specific period and no fund can be and should be taken out on any demand. Like all the other kinds of bank deposits, CD’s also earn interest so it is important that you research where you can find a good rate.

There are several types of CD’s which includes Liquid CD’s, Callable CD, Zero coupons CD, Bump-up CD and Jumbo CD. There is no universal policy regarding a certificate of deposit so talking it out with your bank is a wise move for you to do.

For people who have the money, the Jumbo CD is commonly recommended. This type of deposit comes in a huge denomination usually one hundred thousand dollars at the least. The most common market of such deposit are individuals who are after low-risk forms of investments.

This type of certificate of deposit is pretty much the same with the conventional types. Considered to be time deposits, you just can’t withdraw the money anytime you wish. The typical maturity period ranges from three months to six years with of course a corresponding interest amount that the depositor receives. Since the minimum deposit is way higher than the rest of the CD types, big businessmen are often the clients of such CD.

Any investor would know that there are no assurances when it comes to investment but there are low-risk ones that you can engage into. Try to check on the advantages and drawbacks of Jumbo CD and see whether this is the kind of investment or deposit you are confident in making.

In exchange of the higher rate that investors or depositors receive, this kind of certificate of deposit does not have liquidity unlike what the others can carry. You can withdraw your money anytime but with a penalty imposed for an early withdrawal. Penalties could be very high that the interest returns you have accumulated would just be used for paying the fine. Since there is a need for high investment for jumbo CDs, pension funds are usually the main investments on these. This is what a jumbo CD basically is:

It is a large investment with a large interest return in a shorter period.

As stated earlier, the main advantage of Jumbo CD is that it is extremely a low risk investment. They are also protected or covered by the insurance protection provision policy of the FDIC so there would be no worries when the bank declares bankruptcy.

The main disadvantage of this type of CD is that a penalty is imposed for multiple access of the account. There is a low return of investment so this is not a good option if you are after a big and fast return.

Every kind of investment comes with its own sets of drawbacks and benefits so weighing things on all angles would be the best thing to do. If you are unsure of your decision, there are experts who can help you with out.

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