Any type of savings or investment account has its advantages and disadvantages, and business CDs are no different. Here's an overview of the pros and cons of CDs:
Security is one of the most important benefits that CDs offer. At SCCU, your Business CD has a guaranteed, fixed rate of return, so your interest rate will not go down during the specified term length of the certificate. This allows you to know how much money you will earn on your primary investment, assuming that you do not access the funds in your CD prior to its maturity date.
Another advantage is that CDs typically offer higher interest rates than other types of savings account. Plus, when you open a CD with a credit union, you may be able to get the best business CD rates available.
Since all certificate of deposit accounts require you to choose a term length—which may range from a few months to a few years—you won't be able to easily access your funds without incurring penalties. The highest CD rates are usually offered on CDs that mature over the longest period of time, and in order to earn the highest possible return on your investment, you will need to leave your funds untouched until the CD reaches it maturity date. In addition, if interest rates should become more favorable before your CD matures, you won't be able to change the terms of your CD to the better rate.
When weighing the pros and cons of business CDs, keep in mind that they are just one type of investment that can be part of your overall investment portfolio. If you would like to learn more about SCCU's Business CD accounts or have questions, please contact us
for more information.