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When you have a CD there is interest every month and the interest usually goes back into the CD.
Aren't there times when you can opt to have the interest deposited to your account instead of being reinvested?
I recently bought a CD and I thought I would be asked that. I wasn't.
Are there cases where it's quarterly and not monthly?
Brokered CDs typically make periodic interest payments. Verify the terms to be sure, as some only pay interest at maturity.
Treasury Notes are another possibility. The make interest payments every six months. If you want quarterly payments you could buy two different notes that have interest payments offset by three months from one another.
When you have a CD there is interest every month and the interest usually goes back into the CD.
Aren't there times when you can opt to have the interest deposited to your account instead of being reinvested?
I recently bought a CD and I thought I would be asked that. I wasn't.
Are there cases where it's quarterly and not monthly?
If you're buying a CD directly from a bank, then you can usually choose to have the interest paid out separately. The default normally is to add interest to the CD monthly so you have to give them separate instructions to pay it out differently (some you can do online, others you have to call and let them know what you want).
Brokered CD's will never add interest to the CD. Interest will be paid out in accordance with the terms of the CD when it was issued (monthly, quarterly, semi-annually, annually or at maturity).
I recently bought a CD through online banking. Everything started ok.
The bank sent me a paper form called a Signature Form, along with a receipt and a list of interest rates (which I already could see on the website). I was supposed to sign it and return it. It said something about "W9" on it.
Was this just to give the bank an image of my signature? I was annoyed they didn't exactly spell out why they sent me this.
I wasn't sure if it was required, even, but it says if I don't return it, it could result in "backup withholding" - what does that mean?
I recently bought a CD through online banking. Everything started ok.
The bank sent me a paper form called a Signature Form, along with a receipt and a list of interest rates (which I already could see on the website). I was supposed to sign it and return it. It said something about "W9" on it.
Was this just to give the bank an image of my signature? I was annoyed they didn't exactly spell out why they sent me this.
I wasn't sure if it was required, even, but it says if I don't return it, it could result in "backup withholding" - what does that mean?
The W-9 confirms your social security number to the bank and you are stating that you aren't subject to backup withholding.
Backup withholding is federal taxes required to be withheld if a payer of taxable income like interest doesn't have this form on file from the payee or the payee acknowledges they are subject to backup withholding because of prior delinquencies with the IRS.
The W-9 confirms your social security number to the bank and you are stating that you aren't subject to backup withholding.
Thank you - actually, it wasn't exactly a W9 that I signed.
I will get another copy soon because of another CD so maybe I can tell you exactly what it said. I had never heard of backup withholding before!
You can buy through a stock broker also. In general you will be paid interest every 6 months. When you purchase you will have the option of reinvesting or being paid the interest.
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