Certificates of Deposit

Certificates of deposit or CD's are time deposits similar to savings accounts in that they are insured and thus virtually risk-free. CDs are insured by the FDIC. They are different from savings accounts in that the CD has a specific, fixed term and a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.

How CDs Work

By depositing your money into a CD for a specific length of time (called a "term"), you lock in a higher rate. The longer your term, the higher your rate.

At term end, you have a 10 day grace period during which you can:

• Let your CD renew automatically at the current rate — no need for you to do a thing
• Withdraw all or part of your deposit
• Select a new term
• Make one additional deposit

You can withdraw your funds early if you need to, but there will be an early withdrawal fee equal to one month's interest on CD's of 12 months or less. The early withdrawal fee for CD's with a term between 12 and 36 months is equal to three months of interest. The early withdrawal fee for CD's with a term greater than 36 months is equal to six months of interest.