Certificates of Deposit with LMCU

Ada Branch Manager for Lake Michigan Credit Union Jeff Sorensen joins us to discuss how Certificates of Deposit or CDs work. 

Episode Transcript

Speaker 1 (00:00):
So just what exactly is a CD A certificate of
deposit I believe, but we'll call in the experts on
this one, and how does it fit into your portfolio?
They aid a branch manager for Lake Michigan Credit Union
on the liveline, Jeff Sorenson. Jeff, thanks for doing this today.

Speaker 2 (00:16):
Yeah, thanks for having me.

Speaker 1 (00:18):
So let's start there. What is a CD and how
does it work?

Speaker 2 (00:21):
So the CD, you are right, it is a certificate
of deposit. It is a type of share that you
can have in your account where you really are just
saving the money and it gets locked in for a
specific amount of months, and then from there it's building
interest and growing the money that's in your account. Really

(00:47):
just a way that people can save money and build
what's in the account.

Speaker 3 (00:52):
So, Jeff, what makes a CD different? Kind of take
us through the basics from a savings account or money
market account what you guys offer.

Speaker 2 (01:00):
Yeah, so a typical savings or money market is share
that you're able to pull money from at any time.
They are building interest, But the big difference is that
a CD tip is going to earn you a higher
amount of interest, but you are locking in for a

(01:21):
specific amount of months. You know, people will put theirs
in for you know, anywhere from three months to years,
and if you want to take that money out, there
is a penalty.

Speaker 1 (01:37):
Yeah, so talk about that. What if you pull it
out before the CD matures?

Speaker 2 (01:42):
So if it is pulled up before matures, then you're
looking at paint some fees, which at LMCU it's either
ninety or one hundred and eighty days of interest, So
you're missing out on some of that interest that you
would have been getting. And when that is you could
actually end up doing some money just because you're pulling

(02:05):
it out before it matures.

Speaker 3 (02:07):
So is there a minimum amount someone needs to open
a CD? And is there a limit on that? Because
you know you're talking maybe for instance, like four and
a half percent interest. That's pretty good if you've got
a good sum of money that you can put away.

Speaker 2 (02:20):
Yeah, So like right now, are our CD special is
thirty that's at four point five to five so it's
a great interest rate. But that minimum amount is five
hundred dollars and then there really is no limit to
how much can bed. So a lot of people will do,

(02:41):
you know, some very large CDs or a lot of
times I'll even recommend breaking it up so that way,
for some reason you do have to pull out. As
long as you've got that minimum five hundred in there,
you can break it up and have as many CDs
as you want.

Speaker 1 (02:55):
You learn something by listening to this program. An't a
branch manager for Lake Michigan Credit Union, jeff's Orenson, Thanks
for your time this morning.

Speaker 2 (03:02):
H Thank you