The certificate of deposit is an investment instrument offered by financial intermediation entities, which allows a higher return than savings accounts.
Certificates are acquired for a specific period agreed with the entity at the time of signing the contract. Hence, they are also known as “fixed term deposits”.
According to the Office of Services and Protection of Financial Users (Pro-user) this instrument is ideal when you are sure that you will not need your money immediately, giving you the possibility of increasing the performance of your resources while you wait for the moment in which you will use them. That is why they are recommended mainly when it comes to savings that you are making for medium and long-term plans.
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“The interest rate The annual return you will receive on your money will depend on general market conditions, the amount you invest, and the term you choose. For this reason, before choosing an entity, evaluate several options and select the one that best suits your needs”, explained Prousuario.
Redemption
As it is an instrument with an established term, if you withdraw the money before the agreed time, you may be charged a proportion such as penalty. Everything will depend on the conditions that you have agreed with your financial institution at the time of signing the contract.
However, the market offers alternatives that do not penalize for early withdrawal of deposited money. These are the financial certificates of early redemption.
Another important aspect is that certificates tend to renew automatically. It means that, once the expiration date arrives, you must make sure that your entity knows if you want to reinvest your money or withdraw it. If you do not inform it, the financial product will be renewed for the same period established in the previous contract, and at the current rate at the time.
For this reason, in addition to having the contacts of your account officer at hand, it is important that you keep your information updated in the entity, so that they can easily contact you.
Do not forget!
-Before investing in financial certificates, make sure that the chances of you needing that money before the agreed date are reduced. If you want more flexibility, consider purchasing multiple certificates with different amounts and terms.
-Compare the different returns offered by the market. It may be that a more careful investigation will generate more benefits in the long run.
-Interest rates are reviewed with some frequency. For this reason, ensure that there are no communication obstacles between you and your entity, so that you can find out about any change in this regard.
-Avoid deceptive offers that usually arrive disguised as “opportunities”, generally in informal entities or individuals. They will try to offer you exorbitant returns to attract you, but they will not be able to offer you guarantees or protection. Choose entities that have the identification seal of financial intermediation entities under supervision of the Superintendency of Banks.
For more details: https://prousuario.gob.do/
