Understanding Certificates of Deposit

Learn more about what a CD is and when you should open one.

Tiles spell out CDS over a background of dollar bills and coins.
(Image credit: Getty)

Certificates of deposit, or CDs, can range from so-called time-deposit savings certificates — available in modest denominations at banks, savings and loan associations, and credit unions — to negotiable certificates requiring minimum deposits of $100,000 or more. 

With a certificate of deposit (CD), you’ll earn a guaranteed rate of return on your hard-earned cash, helping you grow your savings with little effort, risk-free. These risk-free investment options can be beneficial for those who want to earn a fixed, predictable rate of return on their savings. However, before opening a CD account, there's a few things you should know. 

Erin Bendig
Personal Finance Writer

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.