How to Save More Money With Certificates of Deposit

If you want to save money for the future and earn more interest than a typical checking or savings account, consider a certificate of deposit (CD) from Bristol County Savings Bank. This popular savings option helps our Massachusetts and Rhode Island customers grow their hard-earned money faster than a standard savings account and offers an easy account opening process. Why choose a CD over other savings account options? Learn the basics of certificates of deposit and how they can benefit your savings goals.  

What is a CD?

A certificate of deposit, or CD for short, is a smart savings option that allows you to deposit a minimum amount of money for a specific period of time. In exchange, you’ll receive higher interest payments than typically found with money market accounts and traditional savings accounts. Additionally, a CD is backed by FDIC insurance so you’re never at risk of losing money.

You can choose the length of the term, ranging from months to years, and earn interest when your CD matures, then take the payout or reinvest in another CD. If you withdraw money before the maturity date, most banks will issue an early withdrawal penalty. It’s wise to invest in a certificate of deposit when you can keep your money on deposit to maximize your savings. 

Laddering CDs

If you don’t want to tie up too much of your savings into a single CD, consider a CD laddering strategy. This approach offers a way to spread out your investment using multiple certificates of deposit with different maturity dates. 

With a laddering CD approach, you can grow your money at a higher interest rate than a typical savings account, and you don’t need to tie up all your savings at once. For example, if you had $10,000 to invest, you could deposit that into four CDs of $2,500 with different terms. Once each CD matures, you could choose to move that money into a new CD or take the cash. 

Here’s an example of how you could ladder various certificates of deposit at Bristol County Savings Bank*: 

• 6-month CD: $2,500 at 5.06% APY
• 18-month CD: $2,500 at 5.13% APY
• 24-month CD: $2,500 at 4.60% APY
• 60-month CD: $2,500 at 4.08% APY 

In this example, after 24 months, you’ll have grown $2,500 to $2,735.29. You can then deposit that money into a 60-month CD that earns 4.08% APY, cash out or keep it in a different account. Once your 60-month CD matures, you can reinvest that money in another CD with a higher interest rate to keep the ladder going. The idea is to stagger certificates of deposit and their maturity dates, so you always have money invested and funds that become available without penalty. At Bristol County Savings Bank, the more money you invest for longer, the higher the yield. 

CD terms and options

You can open a certificate of deposit at Bristol County Savings Bank for as little as $1,000. Our terms range from three months to 60 months, with APYs of 4.08%* to 5.13%*, depending on the term, type and balance. See all Bristol County Savings Bank’s CD rates to estimate how your savings could grow. 

Longer-term savings

If you know you don’t need immediate access to your money and want to earn better rates than with a traditional savings account, a certificate of deposit may be a smart savings tool for you. Bristol County Savings Bank offers a variety of options, including Statement Savings and Money Market Accounts to help you reach your long-term savings goals.

The experts at Bristol County Savings Bank are here to guide you through all life’s stages and can help you decide which savings account or CD makes the most financial sense. If you have any questions about how Bristol County Savings Bank can help grow your savings, contact us or visit one of our Massachusetts branches.