Clean Up Your Finances Before You Invest (4)

A certificate of deposit or CD is an account that usually offers a higher rate of interest than a regular savings account.


CDs are also insured up to $100,000 and the longer the period of investment the higher the interest rate.



On the downside, there are usually penalties for early withdrawal.



A money market account generally earns a higher interest than a regular savings account.


They are also insured and work like a checking account.



However, there is a limit on the number of withdrawals or transfers you can make during a given period of time.



Investing in stocks gives you ownership of part of that company's assets.



When the company makes money, its stockholders usually receive dividends and have the opportunity to sell their stocks for a profit.



On the other hand, if the company does poorly, the stock price will probably fall and you could lose some or all of the money you invested.