What are Certificates of Deposit?

Certificates of deposit (CDs) are time deposit instruments with a bank or brokerage house.

The objective is that you give the institution the money for a period of time. They will tell you up front what the rate of return is, and at the end of that term, you’ll be able to take your money out as well as the interest that you earned during the process.

There are usually penalties associated with taking money out of CDs early, because the instrument is designed for you to have the money available to the institution for a specified period of time.

Sometimes CDs allow you to take advantage of a rollover period if you like the current interest rate and want to continue earning. Otherwise, you can take your money out and either put it back in the bank or use it for something else.

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About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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