Your bank can do more for you than simply hold your money and issue checks. Many banks, especially larger national banks, also offer investment and savings options for customers. Here are some of the more common ones:
Bonds: A bond is a debt security certificate. In simple terms, when you buy a bond you are lending money to some enterprise. That might be a corporation or it might be the US itself. In exchange for lending the money, you get a specific interest rate which is paid to you either at maturity of the bond or at intervals during the life of the bond. The principal is paid back to you at maturity.
The Certificate of Deposit (CD) is perhaps one of the most well known investment options sold at banks. They are a unique type of deposit account with special requirements. They pay a higher rate of interest than a regular savings account which is why people use them as investment options. In general, you put in a specific amount of your money into the account and you receive a fixed amount of interest in return. An important distinction with CD’s is that they are covered by the FDIC up to $100,000.
Brokered CD’s are another form of CD’s....
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