Certificate of Deposit

Posts Tagged ‘money’

Question: Are there different types of Money Market accounts related to a 401k plan?

In my 401k can I put all my contributions into 1 money market account.Or do I have to split my contribution up>

Answer: Yes…although I’m not sure I understand the question you mean to ask.

A 401(k) plan may actually have two or more accounts for you — your contributions will be kept “separately” from your employers contributions for you, for example — but if a Money Market fund is offered for your plan, you should be able to put 100% of your contributions in that Money Market fund.

Investment Facts : Advantages of Investing in a Money Market Account

Question: How to Cash A Certificate Of Deposit ( CD)?

My grandma purchased a cd for me when i was born, and I just recieved it. How do I go about cashing/depositing it into a bank account?
Also, my grandma purchased it from a bank in Idaho…I live in Texas.
She also has recently moved to Texas.

Answer: First you need to contact the bank and find out what the maturity date of the CD is. If it is past its maturity date, you will incur a penalty, usually a certain amount of months in interest if you choose to withdrawal the funds before it reaches its next maturity date. Once you have determined the maturity date, you will need to ask the bank what they require to withdrawal the CD. Tell them you live out of state and can not come to the bank to cash it in. Most banks will allow you to write a letter requesting the CD to be closed with your signature notarized. Make sure to check the title of the CD because that will determine who needs to sign the letter (ie is the CD in Grandmas name with you as beneficiary, is it in both of your names, or your name only). You can also ask if they can wire the funds electronically to you once the cd is closed. Some banks will allow that. I hope this was helpful.

Question: How does a Certificate Of Deposit (cd) work?

I am exploring the idea of opening a cd. I have seen that many banks ask for a minimum deposit of $1,000 to do so.

How does it then work? If I open a 12 month cd with the minimum of $1,000, and the interest rate is %4.25, what am I looking at financially overall?

What are the benefits of doing this, and are there any downfalls?

Answer: You deposit a certain amount of money with the bank and earn the offered interest rate, in your case, 4.25%. At the end of 12 months, you would earn approximately $42.50 = benefit. (The money earned is added monthly though, not annually.)

The downside is that you can’t use any of that money during the entire 12 month agreement. If you need to access it, you do so with a penalty.

Another downside is that the percentage rate of interest may change in the economy during the course of your investment. Let’s say you put your money in a 5-year CD at 4.25% interest, which is currently about average. Then we get a great economy boost, and the average interest rate becomes 8%! But you’re locked into the agreement, so you’d still be stuck at that 4.25% rate.

Some CDs are for a shorter length of time. I’ve done CDs with 4-month, 6-month, and 9-month terms. So generally speaking, CDs are nice and safe, but look around for ones that offer higher percentage rates and shorter terms.

Personal Finances & Money Management : How to Create a Beneficiary for a Certificate Of Deposit