Jumbo CD Rates
First a little background on what a certificate of deposit is. A certificate of deposit is a timed deposit where your money is invested for a certain period of time. You investment is "locked up" for the period of time you choose. Unlike a savings account or money market account where you can withdrawal your money at anytime without a penalty.Certificate of deposit accounts can range from as little as one month to up to five years or more. When you invest your money in a certificate of deposit the CD rate (interest rate) is guaranteed until the CD term ends. When you invest in a savings account or money market account the interest rate can change at anytime. These types of deposit accounts are variable rate accounts.Jumbo certificate of deposit accounts have higher CD rates than regular certificate of deposit accounts. The CD rate is higher on jumbo CDs because the amount of money invested in a jumbo certificate of deposit higher than a regular CD account. Investments of $100,000 or more usually qualifies as a jumbo CD.
When you invest in either a jumbo CD account and regular CD account be sure to place your money in a bank or credit union that is FDIC insured. The maximum amount of insurance per account per depositor is $250,000 until December 31, 2013. After that date the maximum insurance reverts back to $100,000. There is a way to recieve up to $50 million dollars in certificate of deposit insurance from the FDIC. For more information read: FDIC Certificate of Deposit Insurance up to $50 Million.
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