Certificate of Deposit

Personal Finance

A Certificate of Deposit (CD) is a time-locked deposit account that pays a fixed interest rate in exchange for committing your money for a set period — typically 3 months to 5 years. Early withdrawal triggers a penalty (often 3–6 months of interest). CDs are FDIC-insured up to $250,000 and offer slightly higher rates than savings accounts in exchange for the lockup. CD ladders — splitting money across multiple maturity dates — combine liquidity with higher overall yields. CDs make sense for known future expenses (a wedding, a tuition payment) where you want guaranteed growth and won't need to touch the money early.