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Why is it a Good Idea to Invest in CDs?

March 1, 2024

Why is it a Good Idea to Invest in CDs?

Certificates of Deposits (CDs) are deposits made into an account in a financial institution for a certain length of time to gain interest. Think of this account as a savings account, but with a greater annual percentage yield (APY). An APY is the interest you earn on an investment in one year. The reason CDs have a greater APY is because financial institutions usually require a minimum deposit for a specific length of time. This length of time can vary between a few months to many years. CDs are a great opportunity to grow your money, but they can be confusing if you are new to investing and need help getting started. Keep reading for more information on why CDs are beneficial and how to get started. 

Why are CDs beneficial? 

CDs are inherently beneficial because they typically have a higher APY than a traditional savings account. Many savings accounts typically provide an APY below 1%, whereas CDs can yield interest rates surpassing 4%. CDs are a very secure form of investing your money because secure financial institutions are either Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insured. TVFCU is NCUA insured for funds up to $250,000. The FDIC and NCUA are government agencies that protect depositors in the United States against the loss of their deposits if their institution fails. The combination of security and flexibility in CDs renders them an ideal investment tool for both novice and seasoned investors.

How do you get started? 

Consider researching financial institutions to find the optimal APY and time period that suits your needs; we strongly recommend exploring the exceptional benefits that TVFCU provides, not only for CDs but for all your financial requirements. As of March 01, 2024, TVFCU has a limited time 10-month special CD with a $10,000 minimum balance for a nationally competitive APY of 5.5%. If you are reading this at a later date, please go to the TVFCU website (linked below), to make sure our limited time 10-month special is still available. TVFCU also offers more CDs with terms from 6 months to 60 months with a minimum balance of $1,000 and differing APYs. Other financial institutions also offer CDs with a variety of terms, minimum balances, and APYs; however, making an investment with TVFCU is in your best interest, as TVFCU is a not-for-profit financial institution fully dedicated to enhancing our member’s lives. Once you’ve chosen your type, term, and provider, you just have to complete your application (which most financial institutions offer as an online service) and fund your new CD account! 

What are our final thoughts?

We want you to remember that you should embrace the opportunities that come with investing your money, especially in CDs. Investing in CDs is a great way to grow your money, and like any other investment, the earlier you do it – the better. You can always renew your CD and gain continuous compound interest. Click below to learn more about TVFCU’s savings options.

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*Rate reflected as of 3/1/2024. Rates are subjec to change.

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