3 Reasons Not to Open a CD Right Now, Even With Rates at 4%

Certificates of deposit (CDs) are a popular way to generate extra income with minimal risk. Investors simply agree to lock up their cash at a bank for a set amount of time, then receive interest payments at the agreed annual percentage yield (APY).For example, if you invest $10,000 in a 12-month CD with a APY of 3%, you'll get your $10,000 back with $300 in interest once that year ends (or monthly depending on the CD). Your principal, as long as it doesn't exceed $250,000, will also be fully protected by the FDIC even if the issuing bank fails.Image source: Getty Images.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool