What is the COD Full Form in Banking?

The COD full form in Banking is a Certificate of Deposit. This is a certificate of the savings that one makes and is generally offered by credit unions and banks. Account holders normally agree to retain their money in the CD without making any withdrawals for a set period. Withdrawing money early entails paying a penalty fee to the bank.

 Term and Interest Rate of COD:

Most CD interest rates are set, but variable-rate CDs may yield a higher return if interest rates rise. A fixed-rate CD tells you exactly how much you’ll earn at the end of the term, but it could cost you if interest rates climb after you’ve locked in. Certificates of deposits are locked in for a specific time duration. This is the length of time that you agree to keep your monies deposited to avoid any penalties. The period ends on the maturity date when your CD is fully mature, and you can withdraw your cash without penalty.

Are CODs safe to make deposits?

CDs are among the safest methods to invest your money. First, their rate is set and guaranteed. Second, CD investments are protected by the same federal insurance that applies to all deposit instruments. The FDIC also covers the bank accounts and insures them in cases of unlikely events to occur.