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CD
(Certificate of Deposit)
A CD (Certificate of Deposit) is a low-risk, fixed-term savings product offered by banks, with guaranteed interest earnings upon maturity. Investors deposit funds for a set period (e.g., 6 months to 5 years) at a fixed APY, with penalties for early withdrawal.
CDs typically offer higher rates than regular savings accounts or HYSAs but lack liquidity. For example, a 1-year CD might yield 5% APY (2023 rates), versus 0.5% for traditional savings. The FDIC insures CDs up to $250,000 per depositor. Ideal for risk-averse savers with predictable timelines, such as saving for a down payment or supplementing retirement income alongside IRAs.
CDs typically offer higher rates than regular savings accounts or HYSAs but lack liquidity. For example, a 1-year CD might yield 5% APY (2023 rates), versus 0.5% for traditional savings. The FDIC insures CDs up to $250,000 per depositor. Ideal for risk-averse savers with predictable timelines, such as saving for a down payment or supplementing retirement income alongside IRAs.