Certificate of Deposits - CD's

With a Certificate of Deposit (CD), a specific amount of money is deposited and guaranteed to earn a set interest rate. For investors uncomfortable with the unpredictability of the stock market, CDs may provide the safety and competitive rates to protect investment principal and generate income they seek. CDs are most appropriate for purchasing and holding until maturity.

When purchasing a CD you need to pay attention to some important items:

• Competitives Rates—Take a moment to compare rates with those offered by other financial institutions.
• Flexibility—At maturity, automatic rollover to a new CD does not occur. This allows you to choose how to direct your investment proceeds upon maturity.

Substantial prepayment penalties may be charged if CDs are liquidated before maturity. The dollars received upon liquidating a CD prior to maturity are contingent upon current market conditions. The pre-maturity sales price may be less than its original purchase price.

• Variety—CD offerings that allow you to choose the type of CD and maturity date that fit your needs.
• Transfer Service—Transfer your matured proceeds from other CD accounts to take advantage of competitive rates and/or money market funds. Your CDs may risk automatic rollover with current interest rates at your existing financial institution.
• Protection—Funds are insured by the FDIC for up to $100,000 per depositor, per institution.* There is no FDIC insurance coverage for any principal losses that may be incurred.

In general, brokered CDs have longer maturity dates than traditional CDs. A brokered CD is callable at the sole discretion of the issuing depository institution. If the CD is “called”, investors seeking to reinvest their redeemed funds will be subject to reinvestment risk because interest rates may have fallen since the time they first purchased the brokered CD. A secondary market for brokered CDs may be limited.