Certificates of Deposit (CD)

*The APY shown is for fixed-rate CDs under $3,000,000. Minimum balance of $10,000 required to open and obtain the advertised APY. The APY assumes interest and principal remain in account until maturity. Penalty for early withdrawal. Fees could reduce earnings. Not available for Individual Retirement Accounts (IRAs). We reserve the right to decline or limit deposits. Please contact an employee for further information about applicable terms and conditions that may apply.

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There's no time like the present. Get into one of the safest possible investment choices you can make: A Certificate of Deposit (CD)!
 
A CD is an ideal tool for earning a good rate of interest while incurring virtually no risk. Because every portfolio should contain some cash (many experts say about 20%), CDs can be a good way to keep those essential dollars safe while they earn interest. That sounds like a great idea!
 
The minimum deposit to open a fixed-rate CD is $1,000. Open your Certificate of Deposit today.
 

• CD Terms Available: 182 Days to 60 Months
• Minimum Opening Deposit: $1,000
• Early Withdrawal Penalty: May Apply

Learn more about ProGrowth Bank's rates.
 

How a Certificate of Deposit Works

When you purchase a CD, in amounts of $1,000 or more, you must agree to leave your funds on deposit for a predetermined amount of time. It's likely that you will get a higher interest rate by making a longer time commitment, so if you think current interest rates are favorable, it is probably wise to choose a longer duration CD to lock them in.
 
If current rates seem low to you, you might decide to invest for a shorter period, hoping that there will be an interest rate hike soon. Or, open a money market account and earn great rates without the time commitment. Learn more about money market accounts.
 
In shopping for rates, keep in mind that the way interest is compounded is crucial in determining what your annual percentage yield (the amount you earn, as a percentage of what you have invested) will be. Look for CDs that pay compounding interest, not simple interest. Compounding interest means that each time your CD earns interest, that money is added to your principal and begins earning interest as well.
 

Best Features of a Certificate of Deposit

Your funds are insured up to the maximum extent allowed by law. You generally will earn more than you would in other types of savings accounts. You pay no sales charges or broker fees. Once you are locked into a CD, whatever happens in the economy, including interest rate drops, will not affect you.
 

But Remember

If interest rates rise, your money is still locked in at the lower rate. If you need to gain access to your money before your CD comes due, you may pay an early withdrawal penalty. CD interest is taxable.
 

Climbing the CD Ladder

Each time you purchase or renew a CD you're faced with the task of deciding how long you should tie up your money.
 
There is a solution: It's called "laddering." Laddering is a time-tested way to help improve your CD returns without sacrificing safety and helps keep part of your reserves liquid.
 
To build a ladder, purchase several CDs at the same time with different terms in six-month intervals. At the end of each term, renew the CDs with the longest term used in the initial purchase. This strategy provides you with the liquidity, since you will have access to part of the investment every six months without penalty.
 
Laddering can increase your rate of return because most of your money is invested in longer-term CDs, which generally pay higher rates. This strategy also gives you the opportunity to purchase your CDs at different times, providing protection if rates go up or down. If you want to get out of the interest-rate guessing game and make your cash reserves and fixed assets work as hard as you do, consider a CD laddering strategy.