6 tips for first-time CD shoppers

Know your own finances
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Know your own finances

Don Taylor, assistant professor of business administration at Penn State Brandywine in Media, Pa., and Bankrate's investing adviser, advises consumers to consider three factors when looking for a new home for their money -- liquidity, yield and convenience.

For an investor with a smaller amount of capital to invest in CDs, Taylor recommends answering one question: Do you have liquidity concerns?

If unexpected financial challenges force you to withdraw your funds early, Bankrate's 2010 early withdrawal study shows that banks can hit you with hefty fees. In fact, 92 percent of banks in the study will take funds from your principal deposit to cover fees, if necessary.

Not sure how much easily accessible cash you need? Use Bankrate's emergency savings calculator to make sure your savings stash is strong enough before you buy a new certificate of deposit.




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