Things to Keep in Mind with Certificate of Deposits
When looking over a list of CDs, pay attention to minimum amounts needed to open the account. Some banks have minimum CD amounts ranging between $1,000 and $10,000.
When considering the length of time to invest your money, keep in mind that interest rates rise and fall. You may see today's high rate CDs as a great deal, but the money in teh CD will need to be locked into that rate for 5 years or more. In 5 years, the interest rates may increase to a much higher rate and you will be left with earning only the rate of interest locked when you invested your money.
When choosing a bank, confirm that the bank has FDIC insurance. Most insured banks have protection for their customers up to $100,000. Once your savings reaches $100,000 you need to open up another account so you won't lose your money if the bank goes bankrupt.
Finally, choosing to place your money into a certificate of deposit means that you cannot touch it until the CD is up for renewal. If you do need to withdraw the money, there will be a hefty fee so don't deposit your money unless you know for sure you would only need it in case of an emergency.