Are you interested in opening a CD with a Houston-area bank? And no, I don't mean CD as in "compact disc" but rather a certificate of deposit from a bank. CDs are a type of investment where an investor's money is deposited into the bank and is left to mature, with interest, until the terms of deposit have expired. Once the time is up, the investor walks away with their original deposit and the interest that has accrued with it.



Unlike many other forms of investment, the initial investment is insured by the FDIC and, unless it is an investment larger than the FDIC can insure, it will be refunded if the bank loses the money. CDs are appealing to many people due to their low risk; however, CDs do not have as high a potential return as other riskier investments because the investor is only making money off of the interest. Therefore, the rate of the CD is what will determine its profitability.



Generally, the higher the interest rate you can find, the better. When you invest into a CD, you are agreeing not to touch the money you've invested until the terms are up-this can be anywhere from a few months to a few years, depending on what the bank is offering. If you do withdraw the money prematurely, you can look forward to losing a large portion of the interest you've accrued on the CD so far. Most banks offer fixed interest on their CDs but some also offer variable rates. Every so often, a bank may offer a chance to "lock in" at a certain rate, or a chance to take a new rate after a certain amount of time.

Generally speaking, regional and local banks and credit unions tend to offer higher interest rates than big national banks. Although this isn't always the case, smaller financial institutions are at least a good place to look first. Houston is an excellent area to look for good CD rates. Houston has an emergent financial sector that is accompanying its overall population growth. Houston is home to many different corporate headquarters, and Houston has managed to weather the recession/depression better than most cities in America.

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