The amazing thing about a Certificate of Deposit is that you can do anything you want with it. You can have it for a long time, you can have it for a short period of time. You can have it in this bank or that bank. You can cash it out at the end of your term, or you can roll it over and into a new CD. You can do whatever you want with your CD; it is, after all, your money. However, we do have one quick suggestion before you consider opening one and putting your money into it. What do you want to do with that money when you are done saving it?
That’s the fun part, after all. You don’t have to do what other people do. You don’t even have to listen to my suggestions in the least. However, can I tell you that there are so many amazing reasons to take your savings and put it into a CD so that you can cash it out at the end of the term and use it for something amazing? The biggest reason, of course, is that you earn interest on the money you put into that account. Free money for simply moving your savings into a new account is really something special.
While your bank might try and talk you into a CD by telling you all about rates and returns and terms and fine print and other minute details that make your eyes roll back in your head and your mind wander to that beach you wish you were sitting on, we have a suggestion for you. Pick something to buy and then decide how long you want to save before you buy it. That’s so much more fun. Here is a good list of amazing items you can put your money into a CD to buy.
A New Car
If you don’t love the idea of making payments on a car (no one does), you might be tempted to save money to buy one with cash. However, you’re going to earn far less interest saving money for a year in a savings account than you will in a CD. Put that money in there and watch it grow for a year so that you can buy something really amazing with it, and maybe even buy yourself a little gas to go in the car at the same time. It’s a nice idea.
A Down Payment On A House
The most expensive thing you will ever buy is your home. You should always put down money so that you don’t have to finance more than 80% of the value of the home and pay for private mortgage insurance. Additionally, you should start off your homeownership experience with a little bit of equity in your home. We know that you can find what you’re looking for by putting away your money into a CD that earns a ton of interest and you can actually save more to put down than you thought before.
An Amazing Vacation
If you don’t have anything else to buy or you simply want to save for an amazing vacation, put that money in a CD and let it earn a little interest for a year until it’s time to go. That’s one way to make sure you’re not spending that money and wasting it on other things while you wait for your amazing vacation to occur. It’s not always easy to go about planning a vacation without wanting to do some shopping here and there, wanting to make sure you have some money here and there to prepare for your trip and eventually realizing that you have nothing left.
An Investment Property
If you have some money to put away, do it. When you take it out and have earned some serious interest on it, see what happens. You might be able to go about finding you can invest in some property. Perhaps a rental property, perhaps some upgrades to your current home, perhaps you can do anything with it that you want. It’s not something that we can guarantee you can buy the moment your CD matures and you have access to your cash once again, but it is something worth saving for.
A New Business
Are you in the market to start a new business? So many people want to take the plunge, but they haven’t the capital to do it. We know that feeling, and we know that it is not always easy to go out and fund a new business. We also know that sometimes you have to spend some serious time coming up with a business plan and making sure that you are able to invest your money wisely. When you put it into a CD, you can give yourself a set amount of time with which to make that decision and find yourself able to really fund something worthwhile.