Comenity Bank Direct CD

You’ve put in the hours every working day of your life with an eye toward a happy retirement. Every payday and every time you receive benefits, commissions, and other forms of compensation, you set aside money for your sunset years.

But are you getting the most out of your hard-earned money? Parking your cash in a Comenity savings account might not even fund the ticket for that Caribbean cruise you’ve been dreaming about. Are you better of using your commenity bank card?

If you’re saving for the long haul, a better option would be to place your money in Certificates of Deposit (CD). And Comenity Direct offers Certificates of Deposits with rates that are highly competitive in the industry.

What Are Certificates Of Deposit?

If you’ve been keeping your money in a savings account, it’s time you learned of Certificates of Deposit and why they are a better placement for your money.

Certificates of Deposit or CD is a product that’s offered by banks that pay out a higher interest rate than a savings account and other money market placements because the depositor will be required to leave the money untouched for a longer period of time.

The term period of the deposit and its corresponding interest rate will vary from bank to bank. Likewise, the penalty rates if you decide to pre-terminate the placement will be different across banks.

What Are The Main Features Of A CD?

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As mentioned above, a CD placement will yield higher returns compared to a savings or current account deposit. How much higher? On average, you can expect the interest paid to your placement to be 5 times higher than what you receive in a savings account.

CDs are also considered to be a safer, more conservative investment option compared to stocks and bonds. The returns might not be higher but because CDs are not volatile investments unlike stocks and bonds, you’re assured of a good return on your money.

Rate Of Interest

When shopping around for CD placements, there are 4 things you have to consider. First, is the rate of interest. You can choose between fixed and variable interest rates. Both have their advantages.

With a fixed rate, you are guaranteed to receive a specific return during the term period but you incur opportunity costs if the market moves higher. With a variable rate, you can maximize the return if the market trends upward but expose your money to risk if the market moves the other way around.

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Term Period

The second thing you should look into is the term period or the length of time you agree to leave your money on CDs. The term period can vary – 3, 6, 12, and 18 months. Some even offer unusual term periods such as 13 and 21 months.

Whatever term period you choose, make sure it covers a duration of time where you don’t need to touch the money. The third consideration is the amount of the principal that you’re required to place in the CD.

The amount of the placement should be something you’re comfortable with not having during the term period.

Bank Reputation

Lastly, you have to consider the bank offering the CDs. The bank’s reputation in the industry, how it deals with customers, and the terms of conditions of the CD placement.

Preferably, you want a bank that listens to customers and is willing to accommodate reasonable requests. Comenity Bank is one such bank and you might want to consider its CD products under Comenity Direct as an investment opportunity.

What Is Comenity Direct CD Rates

Comenity Direct is the purely online bank of Comenity Bank that focuses on offering depositors savings products with high yields such as CDs. The company is confident that the rates it offers clients are among the best in the industry and their term periods are varied to give you more options.

Below is a summary of the term periods offered by Comenity Direct, the corresponding interest rates, and the Annual Percentage Yield (APY).

  • 1-Year CD: 0.65% APY/Interest rate
  • 2-Year CD: 0.70% APY/Interest rate
  • 3-Year CD: 0.80% APY/Interest rate
  • 4-Year CD: 0.80% APY/Interest rate
  • 5-Year CD: 0.85% APY/Interest rate

Minimum Deposits

The minimum required deposit to open a CD is US$1,500 while the maximum amount for placement is US$10 million per customer. The interest rate is accrued and compounded daily and is credited and posted every month.

Comenity Direct doesn’t have hidden fees and charges in their CD placements and servicing of your account carries no costs. If for some reason you decide to pre-terminate the CD placement, a penalty charge will be levied on your account.

To open an account, simply visit Comenity Direct’s website and fill out an application form. Make sure that you give updated and accurate information.

Once completed, you can make your initial deposit of US$1,500 and start earning higher interest on your money. You’ll sleep comfortably knowing that your deposit is covered by the Federal Deposit Insurance Corporation (FDIC).

Frequently Asked Questions (FAQs) About Comenity Direct And Certificates Of Deposit

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Below are some of the most frequently asked questions about comenity cd’s:

Are there eligibility requirements to open a Comenity Direct account?

Yes. To open a Comenity Direct account you must be at least 18 years of age. You must also be a citizen of the United States or a legal resident if from another country. It’s important to provide a valid Social Security Number (SSN) and a physical address in the United States.

How much is the penalty if I decide to withdraw my placement in a CD?

If your term period covers 12 months to 3 years, the penalty is calculated at 180 days simple interest. If your term period is 4 years and higher, the penalty will be calculated at 3 65 days simple interest.

Is it possible to have the interest earned on the CD placement paid out and deposited into my Comenity savings account?

All you have to do is to call Comenity Direct’s customer service and make arrangements to have interest earnings withdrawn and deposited into your Comenity savings account on a monthly basis. Just make sure that the schedule is arranged 3 days before the maturity date of your CD placement.