No-risk certificates of deposit (CDs) go by many names in the banking industry. They are commonly called no-penalty CDs, risk-free CDs and liquid CDs among other things. Despite their different names, however, they all fit a general model. These CDs offer increased investment flexibility by waiving the penalties for early withdrawals.Conventional CDs deter customers from withdrawing money before the CD matures by imposing heavy interest penalties, severely limiting the liquidity of the product. No-risk CDs minimize or eliminate this problem. The downside is that these CDs typically offer a lower interest rate than a comparable conventional CD.
Picking the Best No-Risk CDs
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