For Christmas this past year, I bought my sister Garth Brook’s 8 CD box set – we’re both big Garth fans, plus on six of the CDs he covers some of our favorite oldies but goodies. After I placed it in my cart, my tech savvy, opinionated 12-year old son asks, “Mom, why did you buy Aunt Bekah CDs? No one buys CDs anymore. I bet Aaron (his younger brother) doesn’t even know what a CD is.”
Wow. Thanks son, for making your mom and aunt feel old. But it’s true – CD sales have fallen drastically since the invention of mp3 players. Artists release their albums online now before a CD is sold in stores.
It got me thinking about the other kind of CD – the Certificate of Deposit (CD) that you can open at your local credit union. This kind of CD won’t be losing popularity anytime soon because it’s a conservative and risk free way to save your money.
A CD is a tool that is different from a savings or a money market account because you give up access to your money for a period of time, which is called the term. In exchange for agreeing not to touch your money during a CDs term, you typically get more interest than with other types of deposit accounts. A CD gives you a guaranteed return – no matter what happens to the economy or the stock market.
Typically, CD terms can range from six months to four years with the longer terms generally yielding the highest interest rates. Now, it can be really tempting to buy a CD with the longest term, but you have to be absolutely certain that you won’t need to withdraw the money before the maturity date because that can result in a high penalty.
Record companies might be dialing back on how many Compact Discs they produce these days, but financial institutions, like Oklahoma Educators Credit Union want their members to realize the value of stashing your cash in a Certificate of Deposit. It’s a safe, secure and risk free way to save money and earn it at the same time. Check out oecu.com for Oklahoma Educators Credit Union’s CD rates.