Certificate of Deposite

A certificate of deposit (CD) is a savings product that earns interest on a lump sum of money for a fixed period of time. CDs differ from savings accounts because the money must remain untouched for the entirety of their term or you risk paying a penalty. CDs usually have higher interest rates than savings accounts as an incentive for lost liquidity.

KEY TAKEAWAYS
Top-paying certificates of deposit (CDs) pay higher interest rates than the best savings and money market accounts in exchange for leaving the funds on deposit for a fixed period of time.

CDs are a safer and more conservative investment than stocks and bonds, offering lower opportunity for growth, but with a non-volatile, guaranteed rate of return.
Virtually every bank, credit union, and brokerage firm offers a menu of CD options.
The top nationally available CD rates can be three to four times higher than the national average rate, so shopping around may result in higher gains.
Although you lock your money up for a specific term when you open a CD, there are options for exiting early should you need that money back.