A certificate of deposit (CD) is a savings account with a fixed interest rate and a fixed term. When you buy a CD, you agree to deposit a certain amount of money for a certain period of time. In return, the bank agrees to pay you a fixed interest rate on your deposit. CDs are a safe and low-risk way to save money, and they can be a good option for people who are looking for a guaranteed return on their investment.
There are many different types of CDs available, so it’s important to shop around to find the one that’s right for you. Some CDs have a short term, such as one year or less, while others have a longer term, such as five years or more. The interest rate on a CD will vary depending on the term of the CD. CDs with a longer term will typically have a higher interest rate than CDs with a shorter term.