Invest wisely: Understanding, buying Certificates of Deposit

In today's economy, it is important to invest wisely. Certificates of deposit (CDs) may be a good option, as they typically offer higher interest rates than savings accounts. CDs can be purchased from banks, credit unions, thrifts (i.e. savings and loan associations), brokerage firms, and independent salespeople. Before investing in a CD: Confirm that the CD issuer is insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). FDIC covers banks and NCUA covers credit unions. Make sure you fully understand the terms and carefully read the disclosure statement. The federally required "Truth in Savings" booklet or other disclosure document that gives the terms of the CD must be made available before the purchase. Read everything before you sign! In addition to the maturity date the disclosure documents will disclose the following: Payment of interest; Interest calculation; Right to delay withdrawals; Withdrawal of principal; Withdrawal of interest Penalty for early withdrawal; Fees & callable provisions Automatic renewal. Be wary of CDs with yields that are substantially higher than the going rate. Information from the April 2009 issue of "The Consumer Insider" newsletter, distributed by the Massachusetts Office of Consumer Affairs and Business Regulations. For more information aobout consumer issues call the Consumer Hotline at 888-283-3757 or visit www.mass.gov/consumer