A CD, or Certificate of Deposit, is a type of savings account offered by banks and credit unions. It is a low-risk savings tool that can boost the amount you earn in interest while keeping your money invested in a relatively safe way. CDs are FDIC-insured up to $250,000, which means they are considered low risk. When you purchase a CD, you agree to keep your money in the CD for a specified length of time, known as the term, without taking a withdrawal. Withdrawing money early means paying a penalty fee to the bank. CDs come in varying terms and may require different minimum balances. The rate you earn typically varies by the term and how much money is in the account. In general, banks offer a variety of terms and rates, so it is important to review these rates and terms with each new CD and renewal to pick the product that best fits your current needs. CDs are a way to put away money beyond what you’ve accumulated in your savings account, without taking on much more market risk. CDs tend to have higher rates than regular savings accounts but don’t allow access to your money until a term ends.