CD's

Certificates of Deposit

"How to Get the Highest Rate on Your CD"

Many of us have learned the hard way that we cannot take a nearsighted view of the economic landscape and expect our liquid assets to flourish. In recent years, with the decline of interest rates, many investors were lured away from the safety of Certificates of Deposit by the securities industry with the promise of higher interest rates. Brokers signed up clients by the droves. Stocks, bonds and mutual funds became the heavy favorites of former CD investors who chose to put their funds at risk with stock brokers rather than lower their standard of living. Some benefited from this; other suffered for it. Especially senior citizens who discovered what can happen to their non-insured accounts with local stock brokers and the larger wire houses when the economy shifts: They lose their hard earned savings.

Ask virtually any bond or mutual fund investor what has happened to their accounts since the beginning of 2000, the response will be unanimous, their Net Asset Values have diminished. Remember the hit the stock market took on 9/11/01? That was a wake up call to perhaps a greater shock to come. Many just rolled over and went back to sleep. On the other hand, many woke up! News reports tell us that hundreds of millions of dollars were yanked out of the securities industry and put back into safety.

The hard lesson learned was one that Will Rogers recited some years ago, "The return of principal is more important than the return on principal."

With the impact of global, national, and local economic changes coming to bear on virtually everyone with the subsequent losses in the stock and bond markets, there is a strong flow of dollars away from risk and back to safety. Where is money safe? The choices are limited to the banks and insurance companies.

When shopping for the best place to invest a CD, most people believe they have one of two choices:
1.) Go down to the bank where they have always done business, or
2.) Look in the paper to see who has the best rate in town.

In choosing one of these two avenues the CD investor has severely limited the growing power of their money. They have taken a nearsighted view of the economic landscape and it will probably cost them. Why? Because there are thousands of banks in this country, all FDIC insured, and it is very likely that they could earn from 1/2 to a full 1% more on their money if they knew it was available!

We study over 2,000 banks daily locating the highest rates in the nation on CDs with terms ranging from 90 days to 10 years! Virtually without exception, we can locate an FDIC insured CD for the term desired at an interest rate that is superior to what can be found in one's own community!

This is the only way to shop for money; anything else is myopic, if not extremely foolish! After all, when one invests in the stock market do they only research hometown stocks? Of course not! An investment counselor looks at the board and points out what they think is the most sound investment. Once the investor is convinced, they place an order, an order in a risky uninsured investment in a company that is probably in some distant city!

If a similar service could be provided offering a fully FDIC insured Certificate of Deposit, people would certainly take advantage of the information. That is exactly what has been occurring!

THERE ARE TWO TYPES OF CERTIFICATES OF DEPOSIT

1.) Bank Certificates
As you well know, rates on CDs are continually changing due to various market conditions. When you purchase a standard CD with a set term such as maturity date, early withdrawal penalty, etc., your options are fixed and non-flexible. The longer term CD that pays periodic interest payments is known as a periodic CD. A CD that pays at maturity is known as an interest at maturity CD.

2.) Annuity Certificates
Most people put their savings in bank CDs because it's FDIC insured. Little do they realize the cost they are paying for this coverage. One out of every three year's interest goes to taxes, plus all the other "catches" the bank attaches to your CDs.

Annuity Certificates are also safe and guaranteed by their reserves, billions of assets, by the world's largest life insurance companies. With an annuity certificate you get to keep the money you would pay Uncle Sam and draw interest on the money until you choose to pay taxes on the interest! This gives you triple compounding of your money, something bank CDs can't do! When you do, you can eliminate paying taxes on up to 85% of your income!

Here is a list of reasons why insurance companies are safe, and good places to put your money.

1. 100% + reserves required by law.
2. Nature of reserves is highly regulated.
3. Reserves are checked regularly and in detail through state audits.
4. Insurance company promises are backed by all the assets of the company.
5. Insurance company insolvencies are very rare.

And let's not forget ALL THE OTHER ADVANTAGES!

1. Non-qualified funds get tax-deferral, so potentially, you can earn much more.
2. There are no "renewable" surrender charges, as in a CD.
3. With a named beneficiary you avoid probate.
4. Free annual withdrawal provisions.
5. Waiver of some or all surrender charges due to confinement in a nursing home.
6. Waiver of surrender charges at death or annuitization.
7. Life income guarantees.
8. Annuity interest rates are usually higher than bank rates.

As you can see, when you become familiar with the facts, it makes a lot of sense to trust an insurance company.

Advisory Services offered through Envision Investment Advisors, LLC., An SEC Registered Investment Advisory Firm.