Certificates of deposit (CDs) are savings certificates, and they are somewhat similar to normal savings accounts. With both a CD and a normal savings account, a customer can put money into the account, have interest accrue on that money, and then withdraw the money for their own personal use. However, CDs function differently than savings accounts in a couple ways:
Banks are not the only ones who offer certificates of deposit. Brokerages and individual sales people offer CDs with interest rates meant to compete with banks and other financial institutions.
Like any investment, you should not just obtain a CD without knowing anything about it. There are few questions you should ask the bank or broker who is issuing the certificate of deposit:
If you have a question about the tax consequences of your CD or have been the victim of fraud that was perpetrated by your supposed "broker", you may want to consult an attorney. Your lawyer will be able to answer any legal questions you have. If you are having legal troubles such as being defrauded, your attorney can help you decide on what course of action to take to remedy your problem in the best way possible.
Last Modified: 09-24-2014 04:18 PM PDTLaw Library Disclaimer
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