What is a CD

Although this is our last day for Halloween themed topics, YOU'RE NOT GETTING ONE!  We're going to steer away from Halloween for today and discuss a question I received.

What is a CD?

A 'Certificate of Deposit' (CD) is a short/medium term investment that is insured by a Credit Union.  This means you can only make money in the deposit and have no risk of loosing it.  CDs offer higher rates of return than a regular short term savings or money market account in exchange for tying up your invested money for a specified period of time.  During this specified period of time, you cannot take your money out.  Money removed before the specified period of time is subject to a penalty (a Forfeit of Interest), meaning the exact amount of money you invested will be returned to you with no extra.  

CDs are considered "time deposits" because a member has agreed to keep money in the account for a specified time period ranging from 6 months to 5 years (at Vantage Credit Union).  Members can open a CD at any VCU branch with a minimum of $250.00 in our smart saver CD which is a great way to start saving!

My experience with CDs

I was introduced to CDs at quite a young age and learned quickly that they are a great investment.

My great-grandmother passed away when I was in middle school and left all the great-grandchildren in the family a specified amount of money.  My dad, being in the automotive industry, always took me to car shows from a very young age and I knew right away that I wanted to buy and restore a Chevelle with my dad right away!

When my great-grandmother passed, my parents took me to the bank (yes...sadly I was with a bank then...lame) to talk with them about CDs.  My parents let me make the final decision, but reminded me that years later when it's time to buy a car, it would be a big help!  I put all the money my great-grandmother left me in a CD for 4 years, and it paid off huge!  When I was 15 years old, I was able to buy my dream car, a 1970 Chevelle because of the money I had invested in a CD!

My dad and I have been on a continuous journey to make the car better and better for the past 10 years!

Signing off...

Rob Cartwright