C.D.s Explained.

A Certificate of Deposit, what Scamford used to allegedly rip off thousands of people of $8 bazillion dollars, is probably the most boring items in finance.  It’s not very sexy.  But really?  You’ve got nothing else to do.  Let’s learn how a C.D. works.

A Certificate of Deposit is basically a piece of paper.  You fork over a pile of money to a bank, and promise that you’ll keep it there for a fairly long period of time.  In return, the bank gives you a piece of paper and promises to pay you a certain amount on top of your investment when the time period is up.

C.D.s usually pay very little.  They’re for people who don’t want to ‘gamble’ with their money.  People who don’t want to ‘risk it’.  People like your grandmother and your senile uncle.

Basically everyone who still has money in this shit economy.

People like C.D.s because they are insured by the government.  The Federal Deposit Insur– you know what.  It’s called FDIC.  For both our benefit, let’s just call it f-dick.

F-dick insures your money for up to $250, 000 dollars so anything at that value or less, you’ll get back.  No matter what happens. You’ll get that money back.

That’s one of the reasons why C.D.s yield so little return on your investment.  F-dick insurance is costly.  Now, if the bank takes the money you give them, and spends it on booze and hookers, you may think you’re screwed.  Not true.  F-dick’s got your back.

In the case of Scamford, his C.D.s were not insured by f-dick. This means that everyone investing with him are not protected by the same insurance and could be in for a horrible surprise.

But not you.  You’re smart enough to stay away from the C.D.s.  You might want to check on your grandmother and your senile uncle, though.  They may have got f-dicked.

  • The Federal Deposit Insur– you know what.  It’s called FDIC.  For both our benefit, let’s just call it f-dick.

  • The Federal Deposit Insur– you know what.  It’s called FDIC.  For both our benefit, let’s just call it f-dick.