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CDs
As part of your overall portfolio, cash investments such as certificates of deposits (CDs) can provide a buffer against fluctuations in the value of your more volatile assets, such as stocks. TIAA-CREF Brokerage Services offers a range of CDs with varying maturities from several financial institutions.
What are CDs?
CDs are single deposit savings instruments that are federally-insured when purchased from commercial banks and savings and loan institutions. Most CDs, including those you purchase through TIAA-CREF Brokerage Services, are federally insured up to $100,000 per account.
CDs typically have maturity dates of anywhere from 30 days to 5 years. CD holders generally have the right to withdraw interest annually (if the CD is of one year duration or longer) but face bank penalties if they attempt to make other withdrawals before the maturity date. Upon maturity, account holders receive the principal and any accrued interest.
Interest earned is taxable whether withdrawn or left in the CD to accrue.
CDs are ideally suited for short-term investing or to provide a guaranteed component of an investor's portfolio.
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