Learning about CD’s and Savings Bonds!



When it comes to banking terms I get confused. I do not know a whole lot about Bonds, CD’s, or Stocks. But, I am planning on changing all of that.

For years my Dad has been trying to get me to invest in CD’s and Bonds for my daughter. In fact for all of her birthdays for the past few years he has been giving me money to place in her CD’s and Bonds. Of course I have not done anything with it as of yet because it is all just so confusing.

Recently I decided to take the time to actually check into all this foreign stuff and I am amazed at how easy it really is. In fact on the Discover Bank website I found all the information I have been looking for. I have now learned that a CD (also known as a Certificate of Deposit) is a lot like a savings account but instead of being able to pull your money out all the time you have a ‘fixed’ account that you let sit there until it is ‘mature’. With a Certificate of Deposit you have a fixed interest terms and rates and once your CD’s mature you can get all your money as well as interest at one time! This I think would be the best for my daughter as we could leave the money in the CD’s until she is old enough to use it!

Savings Bonds are a little more difficult for me to understand. Basically someone pays money for you on your behalf. It goes to the US government for a specific amount of time with a set interest rate. At the maturity date the government will then pay back the money as well as all interest.

Wow! I guess I should have looked into all this along time ago! It really was easier to understand then I first thought!

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