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A certificate of deposit pays a fixed interest rate if you leave the money untouched for a set term, from a few months to several years. Withdrawing early usually triggers a penalty. CDs suit money you know you won't need until a specific date and want protected from market risk.
A one-year CD might lock in a fixed rate that you keep even if savings rates fall during the year.
Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →