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What's The Difference Between A CD And A Bond?


For investors looking for a stable stream of income, CDs and bonds are a good place to start. According to Business Insider, although the two financial instruments have much in common, they are distinctly different in several key areas. For example, CDs are insured by banks--bonds are not. Bonds are traded on the open market--CDs are not. Bonds can be liquidated quickly, but CDs tie up your money. Government-issued bond yields aren't taxed. But if you are in, say, the 24% tax bracket, you'll be taxed $24 for every $100 you earn in interest on your CD. Also, bonds have long-term maturity dates, from at least 10 to as long as 30 years. However, CDs usually mature within five years.

Added on the 19/10/2020 17:31:35 - Copyright : Wochit

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