Top 7 Reasons to Open a Certificate of Deposit

Home Blog Top 7 Reasons to Open a Certificate of Deposit

Posted On: August 9, 2022 by Peoples Bank of Kankakee County in: Personal Finances Retirement Saving

Are you wondering why it makes sense to open a Certificate of Deposit (CD) in today’s financial market? Today we are going to explain what a CD is and reasons to invest in one. Since investing is the best way to make your money work for you, consider opening a CD with Peoples Bank today.

1. Certificates of Deposits Are FDIC Insured

A Certificate of Deposit is a bank product that provides an interest rate premium in exchange for the customer leaving a lump-sum deposit untouched for a predetermined period. It is backed by the FDIC up to $250,000 per person on the account. This means you don’t have to worry about some corporate scandal and competition lowering your principal investment.

2. CDs Offer Low Risk and Have a Guaranteed Rate of Return

Certificates of Deposit are known as low risk, conservative investments in comparison to stocks and bonds. Peoples Bank offers terms ranging from 6 months to 4 years. Although CDs have less opportunity for growth, they offer a non-volatile, guaranteed rate of return. Once that interest rate is locked in for the term, it doesn’t change, even if the interest rate environment changes.

3. CDs Offer Much Higher Interest Yield Than Money Markets

CDs pay a significantly higher interest rate than savings or money market accounts. In effect, they are 5-10X higher than money market interest rates. You can pull your money in and out of your savings account as you please. With a Certificate of Deposit, you’re required to leave your deposit untouched for the term of the CD. If you absolutely must withdraw money from the CD, you may do so by paying a penalty fee, but that is not advised.

At Peoples Bank, we have several Certificate of Deposit specials. Currently, we have a 16 Month CD Special with a 1.26% APY* and an 18 Month Flex CD Special with a 1.15% APY*. In addition to our CD specials, you can see a full menu of CD & IRA CD terms that may also be a great fit.

4. Peoples Bank Has a Unique 18 Month Flex CD

One of the things that’s nice at Peoples Bank is the 18 Month Flex CD. Like the name says, the Flex CD uniquely offers flexibility. People love the ability to withdraw a partial amount (in increments of $1000) or the entire amount, and if it’s past the first 7 days, there is NEVER a penalty. They can withdraw as needed, and again, without penalty. It’s a very handy feature. Normally a CD like that pays very low interest, because of the convenience factor. Peoples Bank has kept theirs at a competitive rate, so people and businesses LOVE IT!

5. Accrued CD Interest is Accessible

One thing you may not realize is that you can withdraw accrued interest from a CD without penalty once it has been compounded (added to the CD principal). In the event you would like access to the interest earned, it is available.

6. Diversification is a Benefit

Most investment professionals agree that diversification is the most important component of financial planning. The idea behind diversification is that a variety of investments will yield a higher return and that investors face lower risk by investing in different vehicles. Certificates of Deposit can play a valuable role in everyone’s diversified financial plan.

7.CDs Offer Peace of Mind

One final benefit of investing in a Certificate of Deposit is peace of mind. CDs offer fixed rates for fixed terms. In a world of unknowns, knowing you cannot lose any of your principal investment or interest earned allows you to sleep comfortably at night. Who doesn’t enjoy a restful night’s sleep?

Do you have lump sum savings that you don’t need immediately? Are you looking for a safe, FDIC insured investment that pays a higher interest yield than money markets? Would you like the flexibility Peoples Bank’s 18 Month Flex CD offers? Peoples Bank of Kankakee County is ready to answer your questions and open your Certificate of Deposit today. We look forward to serving your financial needs!

*Annual Percentage Yield (APY) is accurate as of 8/1/2022

Member FDIC

An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. We can cover your overdrafts in two different ways:

We have standard overdraft practices that are available after your account has been open for 30 days and as long as you maintain your account in good standing.
We also offer an overdraft protection plan, Overdraft Protection Sweep, a link to a savings account. It may be less expensive than our standard overdraft practices. To learn more, ask us about this plan.

This notice explains our standard overdraft practices.

What are the standard overdraft practices that come with my account?

After your account has been open for 30 days and as long as you maintain your account in good standing, we do authorize and pay overdrafts for the following types of transactions:

Checks and other transactions made using your checking account number
Automatic bill payments

We do not authorize and pay overdrafts for the following types of transactions unless you ask us to (see below):

ATM transactions
Everyday debit card transactions

We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction.

If we do not authorize and pay an overdraft, your transaction will be declined.

What fees will I be charged if Peoples Bank of Kankakee County pays my overdraft?

Under our standard overdraft practices:

We will charge you a fee of up to $30 each time we pay an overdraft.
The maximum daily overdraft fee per presentment or item paid using the Overdraft Reserve Program is $150.00 per day.
No per item handling fee will be charged on de minimis overdrafts. De minimis overdraft for this policy means transactions that overdraw your account by $30 or less.
There is an overdraft fee of $5 per day that will be charged beginning the 4th consecutive business day your account is overdrawn.

Nonsufficient funds (NSF) fees - if an item drafted by you (such as a check) or a transaction you set up (such as a preauthorized transfer) is presented for payment in an amount that is more than the amount of money in your account and we decide not to pay the item or transaction, you agree that we can charge you an NSF fee for returning the payment. Be aware that such an item or payment may be presented multiple times by the merchant or other payee until it is paid, and that we do not monitor or control the number of times a transaction is presented for payment. You agree that we may charge you an NSF fee each time a payment is presented if the amount of money in your account is not sufficient to cover the payment, regardless of the number of times the payment is presented.

PAYMENT ORDER OF ITEMS - The law permits us to pay items drawn on your account in any order (for purposes of this section "items" means checks, orders and electronic transactions). To assist you in handling your account with us, we are providing you with the following information regarding how we process those items. When processing checks and orders drawn on your account our policy is to pay lower numbered checks and orders in numerical sequence, but electronic transactions are paid first in the order received. The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented. There is no policy that is favorable in every instance. If the smallest items are paid first, you may have fewer NSF or overdraft fees, but the largest, and perhaps more important items (such as rent or mortgage payments) might not be paid. However, if the largest items are paid first, your most important items might be paid but it may increase the overdraft or NSF fees if funds are not available to pay all of the items. We think our policy attains a reasonable balance between minimizing additional costs to you and paying your more important items. We encourage you to make careful records and practice good account management. This will help you to avoid creating items without sufficient funds and incurring the resulting fees.

What if I want Peoples Bank of Kankakee County to authorize and pay overdrafts on my ATM and everyday debit card transactions?

If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions after your account has been open for 30 days, you may opt in.

You have an ongoing right to change this consent at any time. If your overdraft privilege has been revoked for any reason, the opt-in or opt-out selection may not apply. Please contact your nearest office for more information.

Alternate ways to Opt In/Out or make changes:

By Phone. Our Customer Care Representatives can be reached at 815-936-7600.
By Mail. Peoples Bank of Kankakee County, 333 E. Court Street, Kankakee, IL 60901
In Person. Please visit your local office and ask a representative to help you decide which plan is best for you.