CD Basics

A CD, or certificate of deposit, is a product offered by banks and credit unions that allow you to "lock" your money away for a set amount of time. CDs typically earn a higher interest rate than a regular savings account. It's is a common way people save for things like retirement or a home. Besides interest rates, the biggest difference between a CD and a savings account are the penalties involved. CDs come with a term of 3 months to 5 years or greater, and if you decide to withdraw your money before the term is up, you will get hit with a penalty. See if a CD is right for your savings needs, and learn the basics of a CD investment.