Could you tell me the difference between a 5 year cd and a five year investment cd?
I know it has to do with early withdraw penalties, but I am unsure of what they are. thank you
I know it has to do with early withdraw penalties, but I am unsure of what they are. thank you
cactusgene
Favorite Answer
It is my understanding that a regular 5 year CD can be redeemed early, but is subject to a 6 months interest penalty. An investment CD on the other hand cannot be redeemed until maturity and therefore has no early withdrawal penalty. However, if you need your money before its maturity, your only option is to sell it on the open market through an investment broker, but the price you get is NOT the face amount of the CD, but rather is determined by the market and may be more or less than its face amount and is very much dependent on current market interest rates and the financial stability of the issuing company.
http://www.ehow.com/about_4673248_what-investment-cd.html