A Certificate of Deposit (CD) is a type of savings account offered by banks and credit unions that pays a fixed interest rate over a specified period — commonly 3 months to 5 years. In exchange for locking up your money for the term, you receive a higher interest rate than a regular savings account. Withdrawing funds before the term ends typically results in an early withdrawal penalty. CDs are FDIC-insured up to $250,000, making them a low-risk way to grow savings on a predictable timeline.