CD Rewards
What are the Rewards?
The most significant benefit (reward) for investing in financial institution CD's is that the original amount of money that you invested and any accumulated interest it has earned is protected from loss by the federal government and other insurance funds. There are limits to this protection, be sure to read the information in Federal Deposit Insurance and Other Insurance sections of this site.
A CD investment is a contract that says in simple terms "here is my money for you to use for X number of months at the end of which you will give it back to me and you will pay me Y% interest while you have my money". That is a pretty straight forward contract. There are some conditions to this contract specifically directed to situations where you want your money back sooner than the agreed upon number of months (see CD Terms and Conditions).
CD's also allow you to plan ahead unlike any other fluctuating market. When you make a CD investment you know what the terms and interest rate are in advance. Knowing this can provide you an opportunity to develop a CD investment strategy with fixed returns. You can plan a strategy if you think that interest rate will be going up or a different strategy if you think they are going down (see What is Laddering of CD's)
From another perspective, a major benefit of CD's is that they are not subject to stock market fluctuations.
