Certificate Of Deposit Definition
A certificate of deposit, or CD, is a type of savings account that has a fixed interest rate and term. CDs are FDIC-insured deposits that offer a higher rate of return than a traditional savings account. The longer the term of the CD, the higher the interest rate.
CDs are a safe and low-risk investment option for those looking to grow their money over time. They can be used to save for retirement, a rainy day fund, or any other long-term financial goal. When the CD matures, you can withdraw your money plus interest, or you can roll over the CD into a new one.
If you need access to your money before the CD matures, you can typically do so, but you will be charged an early withdrawal fee. CDs are best suited for those who don’t need immediate access to their cash and who want to earn more than what a savings account offers.
