From the FDIC
A certificate of deposit account (CD) at an FDIC-insured bank is one of the safest, most reliable investments available because it provides a predetermined fixed- or variable-rate interest computation for a set time period (usually three months to five years) and deposit insurance protection of up to at least $250,000 per depositor.
Recently, you may have seen or received advertisements from deposit brokers offering FDIC-insured CDs. While using deposit brokers has grown in popularity because brokers often can negotiate higher interest rates, the CDs they sell may involve more risks than working directly with an insured bank.
FDIC Consumer News has previously cautioned readers to be careful when buying CDs from third parties, but given the increased consumer interest and ongoing reports of complaints, we offer our latest tips and information:
Use a reputable deposit broker.
Be skeptical if the interest rate on a brokered CD is significantly higher than other advertised rates.
Make sure all of your deposit will be fully insured.
Learn whether your only option to withdraw early from a brokered CD is to sell it.
Get more tips and advice and learn what to do if you have a problem with your CD from the FDIC.
As a teen, you start taking more responsibility for handling money and choosing how you want to save or use it. Here are a few ideas to help make your decisions easier…and better:
Consider a part-time or summer job. A job can provide you with additional money as well as new skills, and connections to people who may be helpful after you graduate.
Open a savings account and put money in it for specific goals. Get in the habit of putting at least 10 percent of any gifts or earnings in a savings account right away. Saving a certain percentage of your income before you’re tempted to spend it is what financial advisors call “paying yourself first.”
If you’re ready for a checking account, choose one carefully. Many banks offer accounts geared to teens or other students that require less money to open and charge lower fees than their other accounts.
Once you have a bank account, keep a close eye on it. Watch your balance the best way you can. For example, keep receipts and record expenses so you don’t spend more money than you have in your account and run the risk of overdraft costs.
Understand that borrowing money comes with costs and responsibilities. When you borrow money, you generally will repay the money monthly and pay interest. Always compare offers to borrow money based on the Annual Percentage Rate (APR). The lower the APR, the less you will pay in interest.
Get more tips on managing getting started with money management from the FDIC.
While Financial Capability Month reminds us all that we could do a little bit more to be in charge of our finances, it is also a good time to talk to your kids about how they too can begin to understand finances and how it affects your family.
Kids.gov has smart money sections for kids of all ages, and tips for parents and teachers on how to teach kids about understanding money.
Useful tips include:
Get your kids to write down where they spend their money or allowance so they can see how it adds up
Talk to your kids about “used” versus “new” and how borrowing a book from the library, or a game from a friend, is smarter than buying something new every time
Teach your kids to take good care of their games, books, DVDs and other purchases because it costs money to replace these items
Kids.gov also has a series of comic strips to teach younger and older children about how they can help their parents save money. Children can follow along in a fun and engaging way to learn simple tips such as turning off lights or helping clip coupons to help save money in the long run.
Do your kids prefer learning with games? Have them play money games online to learn more about money. Games such as the U.S. Mint’s Dollar Dive, where kids have to go diving for coins to add more sails to their ship in order to escape a sea monster, help kids understand more about money.
Find more money games.
Get tips on borrowing wisely, saving and more.