Financially savvy parents know that it pays to start building a savings fund for their children early in the game. Though plenty of saving options are available for today's parents, the certificate of deposit (CD) is arguably one of the best. Saving with a CD can be an excellent choice and can help you save more over time because it's a secure, stable and flexible way to build a nest egg.
Saving Securely with a Certificate of Deposit
Parents want the best for their children, so that means ensuring that future needs are met. When you open a CD account, you as savvy parents are using a savings product that generally accrues a higher amount of interest than other ways of saving, and it's also low-risk. Your funds in bank CDs - including Ally CDs - are insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum amount allowed by law.
Stability in Saving
CDs are a stable savings product in that the rate doesn't usually fluctuate, so the outcome is fairly certain. You can secure a specific rate, and you'll know that when your CD matures, you will have earned a specific amount on your deposit. At Ally Bank, for example, you can earn some of the most competitive CD rates available according to Bankrate.com, and with daily compounding, your balance grows faster.
Flexible Savings Options
CDs are offered for a set time period, called a term, which generally ranges anywhere from a few months to a few years. Generally, the longer the term, the better the interest you earn. So you can start a CD for your child's future needs, watch it grow to maturity as your child grows and even continually re-deposit the money into new CDs until you're ready to turn it over to your child.
It's easy to get started saving for your child's future today. Get the scoop at AllyBank.com or call live, 24/7 support at 877-247-ALLY (2559) today.