Anyone Know if Certificates of Deposit are a Good Investment?

Should I start investing now? That’s the question I need to find an answer to. Every day I hear advertisements for so many investment opportunities. I’m at the point in my life where I need to take a serious look at my current financial situation and set goals for my future. I’m a 27-year-old male with stable income, definitely not something everyone has in this economy. I believe I am ready to set financial goals and make important decisions that will secure my retirement when the time comes.

My friends and colleagues are encouraging me to invest in CDs, or certificates of deposit. I briefly did research to get an idea of what CDs are and how I can benefit from this type of investment. It is my understanding that investing in a CD is basically investing a fixed amount of money for a specific amount of time. I could invest for six months, a year, or maybe even more. I’ve given a lot of thought and am considering investing into a 5 year CD. There are plenty of websites on the Internet offering comparisons of 5 year CD rates.

I am happy with what I have learned so far and think this might be the right investment to make. A certificate of deposit will offer me a higher interest than a traditional savings account. I’ve learned that this is a low-risk investment if I take the time to thoroughly read the disclosure and terms.

Finding the best CD rates might be a challenge if I choose to move forward with this particular type of investment. I can buy a CD from a bank, or I can buy through a deposit broker. The deposit broker can often negotiate a higher interest rate with the bank, but purchasing a brokered CD can increase the risk potential. I still have a lot of questions that need answers before taking the next step to invest any money. There is a lot to learn and I’ll be certain to weigh all the pros and cons before deciding if this investment is right for me.