These days, many are curious about to make their money work a little harder in the long run. Few people realize how little it takes to enjoy the investing benefits that have always been associated with the wealthy or those with financial know-how. It doesn’t take an investment whiz to find out which types of accounts are best for each individual. One account that is not only easy to start is the certificate of deposit, or CD plan. Similar to a traditional savings account, this account requires a minimal amount to open and maintain for a specified period of time so that interest, which is normally higher, can be paid upon full maturity. This can be as little as three months or up to five years. Unlike opening a traditional savings account, this can require a certain amount of will power from the depositor.

Banks and other financial institutions can enforce stiff penalties on those who make an early withdrawal. When this happens, it can counteract most the annual percentage yield, or APY. In other words, even if it’s paid back within the specified time, the depositor will not see the same amount of accrued interest that they would have if account were left untouched.

Another benefit of having a CD plan is that it’s protected by the Federal Deposit Insurance Corporation, or FDIC. This government agency protects most depositors up to $250,000 with the exception of most stocks, bonds and similar financial transactions that have high interest payouts.

When opening a CD plan, the investor can have a choice of many kinds of plans. There are some that pay dividend or compound interest upon reaching maturity or have a fixed or variable rate. Those with a few extra dollars to spend may “ladder” their accounts by not placing all of their money into one long-term account but opening multiple accounts with various maturity dates so as to reduce the risk of early withdrawal penalties.

Before a person signs on to a CD plan with a high APY that may have seemed impressive, it is best they sit down and understand all terms involved and rights reserved by the bank or financial institution, such as call features, which are determined by whether interest rates rise or fall. Also check out online deals but be wary because some of these offer astronomical interest rates that sometimes sound too good to be true. This rarely benefits the investor so it is up to them to exercise due diligence by comparing accounts and their long-term investing benefits. Like any other important purchase, be wary of anyone who sidesteps questions with a sales pitch.