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304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
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As you explore investment options, you might look into certificates of deposit (CDs). When you open a CD, you agree to deposit money in the account and keep it there for a certain period of time. In return, you earn a fixed rate of interest.
CDs come in several forms, including the add-on CD. An add-on CD lets you add money to your account during the maturity period, such as 12 months or three years. That’s in contrast to traditional CDs, which typically prohibit you from adding money during the maturity period.
An add-on CD is a type of CD that lets you add money to your account before the maturity period ends. In that way, it’s similar to a savings account. Some banks and credit unions offer add-on CDs.
So, let’s say you open a 12-month add-on CD. Aside from the initial deposit of $500, you’re allowed to stash more money in the account during the 12-month maturity period. Depending on the institution’s policies, you may be able to add money at any point during the CD’s maturity period—and you’ll earn interest on the additional deposits.
A traditional CD, on the other hand, allows only an initial deposit; follow-up deposits aren’t permitted. So, with a 12-month traditional CD, you’d start with a $500 deposit, but you wouldn’t be able to add more cash during the 12-month maturity period. This means you’d earn interest only on the $500 deposit.
Add-on CDs aren’t as widely available as traditional CDs. Among the financial institutions that promote the availability of add-on CDs on their websites are:
Add-on CDs and traditional CDs have similarities and differences.
Among the similarities, both add-on CDs and traditional CDs generally:
Add-on CDs differ from traditional CDs in a variety of ways, including:
As with other types of CDs, add-on CDs have pros and cons.
Alternatives to add-on CDs include:
An add-on CD can be an appealing option for investing. Its primary benefit: You can deposit money throughout the CD’s term, unlike a traditional CD. However, add-on CDs aren’t widely available, and they may come with a lower interest rate than traditional CDs do.
For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We are here to assist you with the best options available!
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