You are not going to get rich investing in CDs. Perhaps between 2 and 3 percentage points of interest can be earned on a 5 year CDs and you are locking your money in for a lengthy time in which interest rates must increase greatly leaving you behind in profits. However, you can close out your CDs should this occur with perhaps simply a month of interest lost. CDs are fantastic financial vehicles for persons who are not sure or have not yet decided where to place their funds to invest. Investing in CDs is basically a place to park the funds and get some interest while the decision is being made. In addition, the CDs are insured by the FDIC (Federal Deposit Insurance Corporation), which has never missed a payment.
CDs can be bought for ranging amounts of time, depending on your plans and are considered time deposits. Sometimes rates differ when acquired at the bank or online. Check the differences in rates carefully before Investing in CDs. When Investing in CDs decide if you need a few CDs or just one jumbo type. If you get a jumbo type and require cash for an emergency, the one month interest lost is simply for the number withdrawn not for the entire number, though it is wise to get more than one of the CDs.
Investing in CDs is an good idea for those on a fixed income. CDs will not go bust and elderly persons do not have to worry about losing income. The negative aspect is that the interest returned on CDs will probably not keep up with inflation. Most of the banks and other institutions offer competitive rates on CDs that do not range much in the rate of interest.