For the longest time I thought a certificate of deposit came in one flavor – vanilla. I deposit some money into a CD, I wait until it matures, and then I decide whether I want to put it back in or do something else. Online banks offer better rates than traditional and you can get fancy by creating a CD ladder, but at the core a CD was a CD was a CD. Then I learned about Ally Bank’s no-penalty CD that lets you close a CD before its maturity without losing interest. OK, that was interesting, but it wasn’t all that exciting.
Then today, I read this Bankrate article about the different types of CDs and was surprised at all the options. I guess I had heard about several of them in the past but dismissed them as hokey (callable CDs? I’ve heard of callable bonds but never CDs). I think some of them are clever just to be clever (and so they can list more rates?) but overall it’s kind of a dry read… so I tried to make it a little more interesting.
How about we take a visit to the Certificate of Deposit Zoo?
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