All fixed rate investments including bank CDs have various inherent types of risk.  Two significant risks are inflation risk and credit risk.  Inflation risk is the loss of value or diminished rate of return due to the erosion of purchasing power by rising interest rates brought on by higher levels of inflation.  Credit risk is caused by the loss of principal due to the default by the issuer of the investment security.  Fortunately, as  long as your certificate of deposit is held in an FDIC insured bank within the FDIC insurance limits, your CD investment has eliminated the most significant risk of principal loss found in fixed rate investment productst by having the full backing of the US government support these FDIC insured bank deposits.

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