Certificate of Deposit (CD)

A Certificate of Deposit (CD) is a savings product that lets you earn interest on your money in exchange for leaving it with a bank or credit union for a set amount of time. Think of it as making a deal with your bank: you agree not to touch the money for a specified term, and the bank generally offers you a predictable interest rate in return.

CD terms can range from a few months to several years. Once the term ends (known as the maturity date), you can withdraw your original deposit plus the interest you’ve earned.

Need the money sooner? You can usually get it, but you may have to pay an early withdrawal penalty.

Because CDs from FDIC-insured banks and federally insured credit unions are generally insured up to applicable limits, they can be a relatively low-risk place to park money you don’t need immediate access to. The tradeoff is that our money is less accessible than it would be in a traditional savings account.