CD Risk

Are Certificates of Deposit Considered Low Risk?

Certificates of deposit (CDs) are one of the safest ways to save. The FDIC (Federal Deposit Insurance Corporation) insures deposit accounts, including CDs, at member banks like Ally Bank up to the maximum allowed by law. As a result, CD risk is very low. In general, when you deposit money into a CD, your money is tied up for the term of the CD unless you pay an early withdrawal penalty. You can avoid the risk of paying a withdrawal penalty in three ways:

  • Choose a CD that does not have an early withdrawal penalty. The Ally Bank No Penalty CD allows you to withdraw all your money, including interest earned, without any penalty, any time after the first six days following the date you fund your account.
  • Keep your money in the CD until the maturity date. This may seem obvious, but a careful look at when you will need access to your funds will help you avoid tying up your money for too long just to get the best rate.
  • Put your money in a money market or savings account that has greater flexibility of access than a CD.

You can manage or eliminate CD risk when you go into it knowing all the terms. With easy-to-understand terms, and a full line of CD options, Ally Bank makes saving convenient, easy and rewarding. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.