What is a certificate of deposit?

A certificate of deposit is a type of savings account with a fixed interest rate and term. CDs, called share certificates at credit unions, tend to have the highest rates among federally insured bank accounts. Here’s a breakdown of various factors that make up CDs. Unlike regular savings accounts, most CDs earn the same rate over time.

Should you buy a CD or a certificate of deposit?

Shopping around is important if you want to earn the top rate on your CDs. Certificates of deposit offer stability for people who want to earn more on their money without the risk inherent in stocks and bonds. Although interest rates may be higher than savings accounts and money markets, read the fine print carefully.

Are certificates of deposit a good investment?

Certificates of deposit (CDs) can be an ideal account to allocate some of your savings, especially if you’re looking for a fixed APY. Bankrate’s list of top-yielding CD rates are much higher than today's national average yield of 1.81 percent for a one-year CD. The following accounts can be found at most banks and credit unions.