Certificates of deposit (CD) are one of the safest ways for conservative investors to save their money for the long term. A CD is essentially a time deposit into which a consumer deposits his money; like a time deposit, it has a set term and a fixed interest rate, although such rates are higher than those offered for ordinary savings accounts. CDs are virtually risk-free since they are also insured by the Federal Deposit Insurance Corporation or the National Union Credit Administration.

At the maturity date of the CD, the money is redeemed along with the interest it has earned. CDs are ideal financial instruments for meeting foreseeable future needs such as a child’s college tuition or to save money for retirement. Investors can also follow a CD ladder strategy, in which they divide the money they have to invest and place it into CDs with different maturity dates, to ensure that they have a steady flow of income.

When confronted with a choice of CD products, you can use an online certificate of deposit calculator to help you determine which one will give you the best yield. All you have to do is type in the value of the CD, the annual interest rate and the life of the CD as expressed in months, and you will not only be provided with the interest earned but also the future value of your deposit. Such online applications are invaluable tools that will help you determine the best place to invest your money in an increasingly competitive marketplace.