In a world where financial products sometimes can be quite complex, certificates of deposit (CDs) are a straightforward option. With a CD, you simply put a certain amount of money into a bank for a fixed amount of time. The bank then pays you interest on that money. At the end of the time period, when the CD reaches maturity, you receive your original deposit plus the earned interest.

CDs Earn Interest The interest rates offered on CDs vary from bank to bank, and fluctuate with market conditions. You typically will earn a higher interest rate on a CD than a traditional savings account.

Early Withdrawal Penalties It's not absolutely necessary to wait for a CD to mature before taking your money out, but it's usually a good idea. While there are penalties for early withdrawal, the size of the penalty is up to the individual institution.

Moreover, Ally Bank also offers a No Penalty CD that allows you to withdraw all your money, including interest earned, without any penalties, any time after the first six days following the date you fund your account.

Beyond Interest: Safety and Reliability CDs offer more than great rates; they also provide safety and reliability. Money in a CD is not subject to the ups and downs of the market. And the funds you place in CDs with an FDIC-member bank are insured by the Federal Deposit Insurance Corporation up to the maximum allowed by law.

Overall, CDs are low-risk and predictable. They can be a useful part of any financial plan. For example:

  • CDs are great for short-term savings when you know when you'll need the money–perhaps for college next year or a home down payment two years off.
  • As part of a well-balanced financial portfolio, CDs can help balance the volatility and risk of stocks with a measure of stability. With CDs, you get a specified interest rate for a [fixed] period of time, so you know up front exactly what you'll get back at maturity.

With an Ally Bank CD, there is no minimum deposit to open and fund an account, and you get a rate that's among the most competitive in the country. Open your account or learn more when you visit or call live, 24/7 customer care at 877-247-ALLY (2559) today.

Ally Bank, member FDIC

Next up:Understanding Certificates of Deposit: the Growing Variety (Part 2 of 3)

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