What's the difference between a CD and a certificate of deposit?

Though short-term CDs can offer flexibility, a longer-term CD could yield a higher interest rate. A certificate of deposit is a time deposit account that pays interest over a set time frame until the CD matures. Banks can offer CDs with shorter terms and CDs with longer terms to help meet different savers' needs.

Should I open a certificate of deposit?

When opening a certificate of deposit, it's important to consider what type of term works best. Though short-term CDs can offer flexibility, a longer-term CD could yield a higher interest rate. A certificate of deposit is a time deposit account that pays interest over a set time frame until the CD matures.

What is a certificate of deposit?

A certificate of deposit is a type of savings account with a fixed interest rate and term. CDs, called share certificates at credit unions, tend to have the highest rates among federally insured bank accounts. Here’s a breakdown of various factors that make up CDs. Unlike regular savings accounts, most CDs earn the same rate over time.