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A certificate of deposit (CoD) is a great way to make your money work for you. This setup is often accompanied by a higher interest rate than its counterparts, yielding a greater return. To explain further, the professionals from Citizens Bank, a leading bank in the Byhalia, MS, area, created this simple guide.

What You Should Know About CoD Bank Accounts

What is a Certificate of Deposit?

A CoD is essentially a type of savings account, but unlike traditional options, you place the money in the account for a specified amount of time. It serves as a small loan to the bank in which you agree to leave the sum in their possession for a period, and they agree to pay you the agreed upon interest rate when the timeframe is met. Taking your money out of the deposit account prematurely will result in a portion or complete loss of the earned amount, so be sure to heed this date. 

CoDs are available in a range of amounts and accompanying interest rates. In most cases, the longer the account term, the higher the rate of return the bank provides. The guarantee of profit is why many people choose a CoD over other types of investments, while the increased average interest rates make them more popular than savings accounts.

Who Should Invest In a Certificate of Deposit?

Byhalia's Top Bank Explains Everything You Need to Know About CDs from Citizens Bank in MississippiThe flexibility for the amount and duration of CoDs make them a feasible choice for many individuals. Once you commit to this type of account, the money must be left alone until the term is over—so be sure you’re in the position to do so. 

If you're on a tight budget and may need to dip into the deposit during an emergency, then a more traditional savings account could be a better fit. On the other hand, if you already have savings set aside to serve as your primary safety net, a CoD is an excellent option.

If you're interested in investing in a CoD, contact Citizens Bank. The Byhalia bank offers a three-month term and goes up to two years. They also have a variety of personal banking services including mortgages and loans. Learn more about their deposit account options on their website or by calling (662) 838-2146.

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