Most certificates of deposit pay a fixed interest rate until they reach maturity.  But, like many other products in today’s fractured financial markets, bank CDs have become more complicated.  Bank customers may now choose among variable rate CDs, CD rates based on an index, long term CDs, and CDs with special redemption features.  Choose carefully and understand all the terms before you invest.  Often these features do little to boost the CD rates, more often they reduce the rate with the allure of a potentially higher rate of return in the future.  The goal of bank CDs is to obtain a high rate of return with prinicpal security not added rate risk while increasing the banks rate of return.

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