Many years ago after I left teaching and was a stay-at-home mom raising my children, my husband shouted to me, as he ran out the door to catch his morning train, “Call the bank and tell them to rollover the CD that matures today.”
“Okay”, I shouted back.
Bank? rollover? mature? CD? – I knew he was speaking English but I wasn’t sure what he had asked me to do! (and this definitely was long before compact disc’s were available!)
So as a dutiful wife I called the bank. I was somewhat embarrassed, but I asked the person to translate for me. I was told that we (my husband and I) held a joint account at the bank. Six months ago we (he) had put $10,000 into a Certificate of Deposit that would earn 8% interest (return) that would come due (mature) on February 14th.
The CD held a fixed amount of money - $10,000 that would never go down,
it had a fixed rate of return – 8% that would not go up or down during the period and
a fixed amount to time – 6 months. If I wanted my money sooner I would forfeit the interest but if I waited to the day, six months later, I could have my money.
I had the choice of going to the bank and withdrawing my $10,000 plus interest or I could “roll” or redeposit the money (principal and interest) into a new CD for another six or 12 months.
That was easy!
Different language, new experience – it’s not rocket science!
If we take the time to learn the terms; if we are willing to ask simple questions and understand simple answers, and do some reading - we too can feel a level of comfort in the world of money and investments over time.
If I could do it, so can you!
