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What Is a Certificate of Deposit Account | Overview

What is a certificate of deposit account? A certificate of deposit (CD) offers a secure way to save your money. When you buy a CD account, you deposit a sum of money into the account for a pre-determined period of time where it earns a fixed interest rate until it matures. 

Want to learn more about how a CD works? Read on. 

How Does a Certificate of Deposit Account Work?

Certificate of deposit

Certificate of deposit accounts are offered by most banks and credit unions as a way for people to earn interest on their savings. You deposit money in a CD account for a set period of time at a fixed rate.

Earnings on your certificate of deposit are taxed as interest income by both federal and the state governments. This is true even if you redeposit the earnings back into the balance of the CD.

Open a CD at Synchrony Bank today

What Makes a CD So Safe?

Unlike some other savings products that are reliant on the stock market and other fluctuating variables for their earnings, a certificate of deposit earns the same interest for the life of the certificate.

Exceptions to this rule are special CDs called “bump-up CDs” that allow you to switch your original interest rate to a higher rate, if rates rise on similar CDs.

Where Can I Find a CD?

To get started on your CD account, contact the banking representatives at Synchrony Bank.

Synchrony Bank has award-winning deposit products and offers 24/7 online support via desktop, tablet or mobile, so you can manage your money on your terms. Our certificates of deposit allow you to pick your CD term from 3 months to 60 months, and begin with minimum CD deposit requirements.

Find Synchrony Bank online today or call us at 1-844-345-5789 to get started with your certificate of deposit account today. 

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Sources:

Investopedia: http://www.investopedia.com/terms/c/certificateofdeposit.asp

The Wall Street Journal: http://guides.wsj.com/personal-finance/banking/what-is-a-certificate-of-deposit-cd/

Investopedia: http://www.investopedia.com/ask/answers/020515/how-are-yields-taxed-certificate-deposit-cd.asp 


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