a question about ING cd's

[cepmom]

I have recently opened several ING accounts for myself, DH and kids and that got me thinking about the CD's they offer. I have never opened a CD before and really don't know much about them. Can anyone explain the in's and out's of a CD? I do know that you can not take the money out for the time specified, but is that all there is to it? How often is the interest added? Is it monthly? Or yearly? Thanks in advance!

 

[missmulan]

I have an ING CD and it really depends on you. You choose how long you want to leave that amount (whatever amount you want) in your CD acct. Once you've clicked on a time frame, you'll have to wait it out until then before withdrawing. Of course, the more time you put it in and the more money you put in it will give you a better rate.

 

[cepmom]

thanks for the reply...how do they calculate the interest? For instance, the 5 year cd has an interest rate of 4.10%. Is that added to your cd account monthly just like the regular ING accounts? How does that work?

 

[missmulan]

I think your total interest gets deposited into your account at your maturity date. In fact, I took a look at my ING cd acct last night and the balance says my initial amount. But in another column it will tell me "interest earned to date". That interest money is not reflected in my balance. Unlike the regular savings.

 

[cepmom]

thanks missmulan
I did find a FAQ section on ING for their cd accounts. I'm still not quite clear on how the interest is accrued (basically, I'm trying to figure out how much interest I can earn if I put xxx amount of dollars in a cd account for xxx amount of years). The only account I've had experience with is a basic savings or checking account.

 

[zippeedee]

I did the five cd "ladder" last year. The interest is calculated monthly, but it does not compound (add to the original balance). I am so not a mathmagician but I think it ends up being 4.1% annual rate on your original deposit amount. I still think its a good deal, and really easy to set up. The one thing that is kind of a pain is that even if you set up the account online, you have to call them or the cd renews automatically for one year. I want to renew the expiring one year for five years to keep the ladder going. Online is just so much easier than waiting on the phone.

 

[deltachi8]

I did the five cd "ladder" last year. The interest is calculated monthly, but it does not compound (add to the original balance). I am so not a mathmagician but I think it ends up being 4.1% annual rate on your original deposit amount. I still think its a good deal, and really easy to set up. The one thing that is kind of a pain is that even if you set up the account online, you have to call them or the cd renews automatically for one year. I want to renew the expiring one year for five years to keep the ladder going. Online is just so much easier than waiting on the phone.

i love ING but if they dont compound the interest you may be able to find a better deal at a different bank. I am shopping for CDs right now.