Certificates of Deposit (CDs)
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What benefits do CDs add to an investment portfolio?
CDs offer absolute predictability. You lock in a rate and you’re guaranteed to earn that rate for the
duration of the CD term. Because you’re locking in a return for a specific period of time, you generally
receive a higher yield than savings accounts, with more safety and stability than stock and bond
investments.
CDs also provide an excellent foundation for a portfolio that contains investments that seek higher returns
with greater risk. The safety, low cost and guaranteed return that CDs offer mean they’re effective
diversifiers for almost any portfolio. The bottom line is that it makes sense for most people to have some
portion of your investment portfolio in CDs.