CD

Certificate of Deposit

A CD is a savings product that holds a fixed amount of money for a fixed period of time (term) and pays a fixed interest rate. CDs typically offer higher rates than regular savings accounts.

CD terms range from a few months to several years. Early withdrawal usually incurs a penalty. CDs are FDIC-insured up to $250,000 and are considered very safe investments. They're useful for saving money you won't need immediately.

Related Terms

Savings Account

A savings account is a deposit account that typically earns interest on the balance. It's designed f...

APY

Annual Percentage Yield

APY is the effective annual rate of return taking into account the effect of compounding interest. I...

Interest

Interest is the cost of borrowing money or the return earned on deposited funds, typically expressed...

FDIC

Federal Deposit Insurance Corporation

The FDIC is a US government agency that provides deposit insurance to depositors in American banks. ...

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