Certificate of Deposit (CD)

A Certificate of Deposit (CD) is a savings account offered by banks with a fixed interest rate and a set maturity date. When you invest in a CD, you agree to leave your money deposited for a specific period, ranging from a few months to several years. In return, the bank pays you interest, typically higher than regular savings accounts. The longer the term, the higher the potential interest. If you withdraw money before the maturity date, you usually face a penalty. CDs are considered a safe, low-risk investment suitable for funds you won’t need immediately.