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[H364]High Yield Safe Investments

by Gen Wright, Gen

What to do with your hard earned savings with the current hard times we are in? Invest or deposit it in a bank in the form of a Certificate of Deposit otherwise known as CD? With the uncertainty high based on the severity of the financial meltdown, investing your money in business is a very risky proposition. Placing your money in banks as CD is the safest way.

A CD is commonly called "time deposit". It is similar to your ordinary savings account except that you can't withdraw it easily. A CD have fixed terms or duration where you have to keep your money in the bank. The common term is 3 months but some offer up to 5 years. During these times, you can't withdraw your money, but you are guaranteed to earn fixed interest rates. This service is offered by banks, thrift institutions, and credit unions. Your deposit is safe as it is insured by the government through FDIC's, up to 50 million USD.

Based on the current situation it is very likely that banks will be increasing the interest rates. Why? Because banks need to accumulate cash, with people low on money they need to offer competitive rates in order to entice people to deposit. That being the case, you'll find it difficult to find the best CD rates currently offered, with the tons and tons of information you have to filter and consider. There are many financial websites that can help you on this as the sites collect and organize all the current promotional rates of banks. Just browse through their bank reviews which were made for your convenience.

Consider this example you might find on the internet:

"First Command Bank is offering one of the best CD rates for a 12 month CD, the CD rate for balances $10,000 and up is 3.93% and the APY is 4.00%. Balances under $10,000 receive an interest rate of 3.90% and a yield of 3.95%."

If you're not well informed you might consider this as a great deal. But this one might be the best CD rate:

"Dime Direct is offering a promotional 6 month CD that yields 5.00%. To qualify for this promo CD rate you will need to open a Prime Dime Checking Account. The offer is only available in New York, New Jersey and Connecticut. The minimum opening deposit for the CD account is $500 and the maximum deposit is $100,000".

Now that's way higher than the average rate being offered. Both of the information can be found at Monitor Bank Rates. That's how comprehensive the reviews are in their site. The information provides balanced views of the promotions such that it's easy for you to decide which one is best.

Aside from this, financial sites also have online calculators for CD's. These calculators will help you determine how much interest you can earn on a CD. The calculators are very easy to use; you just need to input few values. To determine the amount of interest you will be paid on the CD, just enter the CD deposit amount, the term of the CD, the CD interest rate and how interest will be compounded and viola you have the amount

During these tough economic times, where there is uncertainty in your income, choosing the right investment is crucial. Though the global economy is a mess, we still have to find ways to continue earning wages and investing. Most of us have some savings but where to we place our savings to earn the best interest rate? Based on my personal experience I have listed two safe investments that doesn't carry the risk of losing money, require a minimum amout of time and effort to maintain.

My all time favorite way is investing in insurance. With insurance, the insured pays periodic payments to the insurance company. This payment is called premium. Usually insurance benefits amount to more than the premiums. In return, in the event something happens to the insured, the insurance company will pay the beneficiary the agreed face value. The agreement between insured and the insurance company is known as insurance policy.

There are several types of insurance, life, accident, health, etc. I invested in two life insurance policies, one for my mother with me being the beneficiary and the other is my personal insurance. One thing I like about insurance is the amount that you will be investing is not a one time payment; instead it's divided into terms. The terms can be annual, quarterly, or monthly. I'm paying only 8,800PHP per year on my first insurance and 6,000PHP per quarter on my second.

Insurance companies just doesn't pay the policy's face value amount, but also offers other benefits like hospitalization cost subsidy in case of sickness or accident. Hospitalization subsidy can amount to as much 1,000PHP daily. Another feature of insurance is the dividend. In my first insurance, I receive as much as 2,200PHP yearly as dividend. In my second insurance I have the option to invest in a balance fund which I did. You can also take cash advance or a loan on your insurance. I'm paying only 10 percent in interest which is paid yearly.

However as a word of caution, go for insurance that offer premium you can afford, because you might lost your investment by forfeiture. When choosing which insurance company to apply, rely on the ones that have been on the business for a long time and has a rock solid reputation for benefit payments. In the Philippines your investment in insurance is guaranteed by the Insurance Commission is a government agency under the Department of Finance, but only when the amount involved does not exceed 100,000PHP.

Another good investment is time deposit or certificate of deposit (CD). Unlike savings account where you can deposit and withdraw anytime, CDs have terms which can be 30 days or up to 5 years. Within this duration you cannot withdraw or add funds. In exchange of this, your deposit earns higher interest rates. CD rates can be as high as 3.5 percent depending on the length of the term and the amount of deposit. One disadvantage of this over insurance is, the deposit is one time cash out. Most CDs in the Philippines has a minimum of 10,000PHP pesos but to earn higher interest rates you need at least 100,000PHP. Your investment is safe as the deposit is insured by the Philippine Deposit Insurance Corporation (PDIC) for up to 250,000PHP.

These are two investments that I consider safe and easy. No risk of losing money as long as the amount is with in the guaranteed amount specified by the government agencies.

Article Source : Pg. 124

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Both Gen Wright & Frank Elliot are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Gen Wright has sinced written about articles on various topics from Terrier Dogs, Acne Treatment and Lose Weight. Compare the (Certificate of Deposit Rates), Online Savings Rates,. Gen Wright's top article generates over 1220000 views. to your Favourites.

Frank Elliot has sinced written about articles on various topics from Finances. Compare the Best (Certificate of Deposit Rates),. Frank Elliot's top article generates over 165000 views. to your Favourites.