What is the difference between a CD and a bond?

While CDs and bonds have various similarities — both are low-risk investments that often earn a fixed rate — there are several differences that can factor in when you’re choosing between the two: Generally, both CDs and bonds can be safe investments.

Are Treasury bonds riskier than CDs?

This means that some bonds are riskier investments than CDs. However, it should be noted that Treasury bonds are backed by the same federal government that funds the FDIC (Federal Deposit Insurance Corporation). For this reason, federal bonds and CDs carry virtually the same (very low) level of risk. CD income is generally taxed as normal income.

Should you invest in a CD or a bond?

Here's an explanation for Certificates of deposit (CDs) and bonds are both popular with savers since they’re low-risk investments that may pay slightly higher yields than traditional savings accounts. With both CDs and bonds, your money will often be tied up for a set period of time in exchange for a fixed rate of return.