Don’t leave your savings to chance!
We applaud you for doing your research regarding various savings options for your hard-earned money. If you’re looking for a place to build up emergency savings or lock in higher fixed interest rates for a specific goal, then a Certificate of Deposit (CD) is an ideal choice. Regardless of where you are in your financial journey, it’s wise to set money aside to save for a rainy day or a short-term savings goal.
In the past, you may have heard parents, grandparents, or seasoned co-workers talk about opening a CD or “cashing out a CD” and it’s important to determine if this type of savings account is still relevant today. The good news is that CDs are still an excellent way to save!
To get started, let’s learn what a CD is and how it can help you save. Simply put, CDs are types of savings accounts offered by financial institutions. Part of the agreement of a CD is to keep an established amount of money in it for a specified period of time and, in exchange, you benefit from locking in the high interest rate.
Often, you’ll find more favorable CD rates versus standard savings accounts; however, per the specific CD agreement, withdrawing money early before the CD’s maturity date will often result in paying a penalty.
Here are just a few ways to use a CD:
You can now lock in higher fixed interest rates with a First Bank CD at 5.05% APY2 for 7 months. If you prefer a longer timeframe, lock in 4.85% APY2 for 13 months or 4.50% APY2 for 20 months.
Can’t decide which period of time to choose? Let’s do some quick math with an example of your initial deposit of only $1,000:
$1,000 deposit at 4.94% interest rate/5.05% APY for a 7-month term earns an estimated $29.11.3
$1,000 deposit at 4.75% interest rate/4.85% APY for a 13-month term earns an estimated $52.78.3
$1,000 deposit at 4.41% interest rate/4.50% APY for a 20-month term earns an estimated $76.08.3
Of course, the higher your deposit, the higher your estimated earnings!
Learn more about First Bank’s CD options.
If you’re looking for a place to put your money for your longer-term savings, such as wealth building for retirement, you’ll want to consider adding a Roth or Individual Retirement Account (IRA) to your overall savings strategy.
Fire up your savings with a CD from First Bank by visiting a branch, opening a CD online or contacting us.
In the past, you may have heard parents, grandparents, or seasoned co-workers talk about opening a CD or “cashing out a CD” and it’s important to determine if this type of savings account is still relevant today. The good news is that CDs are still an excellent way to save!
What is a CD?
To get started, let’s learn what a CD is and how it can help you save. Simply put, CDs are types of savings accounts offered by financial institutions. Part of the agreement of a CD is to keep an established amount of money in it for a specified period of time and, in exchange, you benefit from locking in the high interest rate.Often, you’ll find more favorable CD rates versus standard savings accounts; however, per the specific CD agreement, withdrawing money early before the CD’s maturity date will often result in paying a penalty.
What are the benefits of a CD?
A CD is designed for anyone who wants to increase their savings, save for a specific goal, or put some money into an account that is “out of sight and out of mind.” Alicia Kallal, First Bank’s Product Management Officer, said, “A CD is a great tool to use to put some money aside for a savings goal that you know is coming up. Plus, you get to lock in higher interest rates.”
She added, “It’s even a great safeguard to know the money is set aside and not easily accessible. For many, this makes it even easier to save.”
Are there specific uses for a CD?
Although you can use a CD to save for whatever you’d like, often, savers use them to save for a specific purpose. “CDs are a great way to sit back and watch your money grow,” said Kallal. “CDs can be the perfect savings tool for everyone 13 and up.1 Select the term that works best for you and watch your savings increase!”Here are just a few ways to use a CD:
- Save for a down payment on a house!
- Put money aside for a rainy day or emergency!
- Save for a new roof, windows, or solar panels!
- Save for a wedding or honeymoon!
- Any reason you choose!
You can now lock in higher fixed interest rates with a First Bank CD at 5.05% APY2 for 7 months. If you prefer a longer timeframe, lock in 4.85% APY2 for 13 months or 4.50% APY2 for 20 months.
Can’t decide which period of time to choose? Let’s do some quick math with an example of your initial deposit of only $1,000:
$1,000 deposit at 4.94% interest rate/5.05% APY for a 7-month term earns an estimated $29.11.3
$1,000 deposit at 4.75% interest rate/4.85% APY for a 13-month term earns an estimated $52.78.3
$1,000 deposit at 4.41% interest rate/4.50% APY for a 20-month term earns an estimated $76.08.3
Of course, the higher your deposit, the higher your estimated earnings!
Learn more about First Bank’s CD options.
Are CDs FDIC insured?
Great news! CDs are insured by the Federal Deposit Insurance Corporation (FDIC), meaning your money will be protected up to $250,000 per depositor, per FDIC-insured bank, per ownership category. In addition, as long as you keep your money in the CD for the term of your agreement, you’ll earn a secure, fixed rate on your money.If you’re looking for a place to put your money for your longer-term savings, such as wealth building for retirement, you’ll want to consider adding a Roth or Individual Retirement Account (IRA) to your overall savings strategy.
Fire up your savings with a CD from First Bank by visiting a branch, opening a CD online or contacting us.
1Account holders 13 to 17 years old must have a qualified parent or legal guardian as a joint owner to open a Certificate of Deposit (CD).
2CDs may be opened in-branch or online. Annual Percentage Yield (APY) is accurate as of 03/12/2024. APY may change before CD is opened and funded. $1,000.00 minimum balance required to open and obtain APY. Maximum balance limits apply. A penalty may be imposed for early withdrawal.
3These examples may not be identical to our system calculations, and earned amounts may vary. Interest earned for each term is estimated using: the interest rate displayed; the daily balance method to calculate interest which applies a daily periodic rate to the balance in the account each day and assumes that interest is paid on the last day of each calendar month (using the number of days in each of the 12 months in calendar years 2024 and 2025); monthly compounding of interest; monthly crediting of interest to the account; and no minimum balance required to earn the Annual Percentage Yield (APY).
2CDs may be opened in-branch or online. Annual Percentage Yield (APY) is accurate as of 03/12/2024. APY may change before CD is opened and funded. $1,000.00 minimum balance required to open and obtain APY. Maximum balance limits apply. A penalty may be imposed for early withdrawal.
3These examples may not be identical to our system calculations, and earned amounts may vary. Interest earned for each term is estimated using: the interest rate displayed; the daily balance method to calculate interest which applies a daily periodic rate to the balance in the account each day and assumes that interest is paid on the last day of each calendar month (using the number of days in each of the 12 months in calendar years 2024 and 2025); monthly compounding of interest; monthly crediting of interest to the account; and no minimum balance required to earn the Annual Percentage Yield (APY).