Certificates of Deposit can be an overlooked savings account option for some; however, they are offered by most financial institutions. In essence, a CD (Certificate of Deposit) is a federally insured savings deposit with a maturity date – an agreement between the institution and the customer where the bank pays an interest rate premium in exchange for the customer leaving a sum of money with the issuer for a predetermined time period.

While a CD may not have been your first though for a deposit account, CDs can be a powerful tool in your savings plan. Check out these benefits of saving money with a Certificate of Deposit.


As a federally insured saving deposit account, a CD is a much lower risk choice for consumers than higher interest investment vehicles. Your deposit is insured the same way that a saving or checking account would be, so in the event of any unforeseen difficulties experienced by the issuer, you are guaranteed to get your money back. This means that as long as you are comfortable with the maturity time period of the deposit, you can rest easy knowing your savings are safe.

Higher Returns than a Traditional Saving Account

While traditional savings account balances are more accessible to the depositor, the tradeoff with a CD is the higher interest rate offered. While withdrawing your funds earlier than the maturity date may result in a penalty, if you plan accordingly from the beginning, CDs generally pay significantly better interest rates than traditional savings.

Flexible Terms

One of the biggest deterrents to consumers considering putting their money into CDs is the thought of not being able to touch the money for the term of the certificate. Fear not! CDs, while illiquid, are highly flexible in the terms of maturity and provide consumers with options to best fit their needs. Many CDs are offered with a wide range of terms, from as short as three months up to a few years.

Fixed, Predictable Returns

As opposed to playing your hand at the stock market or other fixed income investment vehicles, there is no guess work when it comes to CDs. The rate you are quoted is the payout you will receive at the end if you follow the CD terms.

Whatever your savings needs may be, Mechanics Cooperative Bank has a wealth of financial products to help you meet your goals. Take a look at our schedule of rates and fees online and stop in to talk with an representative about what may be right for you!