As a young adult, you may be just starting to grow your savings. This often entails planning your future in terms of education, career and family. While it's sometimes easy to forget your finances when dealing with all of life's other necessities, planning for your financial future now may save you a lot of stress as you get older. Moreover, as a young adult, you are more likely to have the advantage of time on your side, so bank accounts like certificates of deposit (CDs) may make a lot of sense.
Certificates of Deposit 101
Do you want to grow your savings but are not sure how CDs work? Here's a quick lesson. A certificate of deposit is a type of account offered by banks - including online banks like Ally Bank - that generally allows you to save money at a higher interest rate than you'd find in savings accounts. You deposit money in a CD for a predetermined length of time, or term, that generally ranges anywhere from a few months to a few years. During this time, your money usually accrues interest at a fixed interest rate. Then, at the end of the CD term, you can either withdraw your funds or renew your CD.
Choosing What Works for You
Most CDs are subject to an early withdrawal penalty if you "cash-in" your CD account before it matures. On the other hand, if you think that you may need access to your money earlier, consider a CD that's a little more flexible. The Ally Bank No Penalty CD, for example, allows you to withdraw your entire balance, interest included, anytime after the first six days of initially funding your account (a federally regulated "waiting period") without incurring a penalty.
Opening a CD
At Ally Bank, we've made the process simple and straightforward. Plus, we offer some of the most competitive interest rates available according to Bankrate.com, and we make managing your account online convenient, secure and easy.
Regardless of where you are in your financial journey, Ally Bank has ways to help you grow your savings for the future. From our Interest Checking Account and the Online Savings Account to a full line of CDs and more, Ally Bank works hard to live up to our name. Get the scoop at AllyBank.com or call live, 24/7 support at 877-247-ALLY (2559) today.