DayCents

Certificate of Deposit (CD)

A CD is a savings product that locks your money for a fixed term — from a few months to five years — in exchange for a guaranteed, usually higher, interest rate. Withdraw early and you forfeit some interest, so CDs suit money you won't need until a known date.

A 'CD ladder' splits money across staggered maturities so some comes due regularly while the rest earns longer-term rates. CDs are FDIC-insured, making them a safe way to lock in a rate when you expect rates to fall.