A 6 month CD (certificate of deposit) is a time deposit with a fixed rate for the entirety of the 6 month term. Upon maturity of the certificate you can withdraw the balance without penalty. 6 month CD’s are FDIC insured for up to $250,000. A penalty will typically be enforced for early withdraw of funds.
Banks offer daily, monthly and quarterly compounding rates. The yield on a 6 month bank CD is higher than the rate because the yield factors in compounding interest over the term of the certificate. Many financial institutions require a minimum deposit for 6 month CD accounts, some require no minimum deposit.
Finding the right 6 Month CD
Finding the best 6 month CD rates is not going to be the only aspect you look for when selecting your certificate. You need to keep in mind minimum deposit amounts, interest earning withdraw guidelines, whether the financial institution is FDIC insured and APY (Annual Percentage Yield).
A 6 month CD is one of the most safe and secure ways to invest your money. The term is short and often times the rates are very good, although not as good as some of the longer term CD accounts. In this economy it is important to invest your money wisely and securely. A six month CD is one of the best ways to do that. In fact the 6 month CD has quickly become an extremely popular product with the general public, therefor causing banks and credit unions to become far more competitive with there rates. In this scenario it is you and me that benefit.
Because of the short term the 6 month CD gives you flexibility and security.