What is a certificate of deposit (CD)?

Here's an explanation for A certificate of deposit (CD) is a time deposit account in which your money accrues interest at a fixed yield for a set period of time, or term. CD terms typically range from as short as a few months to as long as five years, or even longer.

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.

What is a certificate of deposit & how does it work?

Certificates of deposit are time deposit accounts. They earn a fixed rate of interest on the money you invest for a fixed period of time. Unlike a savings account, CDs generally don’t allow you to withdraw the principal at any time during the term. If you withdraw money before the maturity date, you’ll often pay an early withdrawal penalty fee.