Definition
A savings product where you deposit money for a fixed term at a set interest rate, usually offering higher returns than a regular savings account.
What to consider
- Compare different CDs for the best interest rates and terms.
- Know the penalties for early withdrawal before committing.
- Consider CDs as a safe, low-risk savings option.
Real world scenarios
- To earn a better interest rate on her savings, Mia put a portion of her money into a Certificate of Deposit (CD) with a fixed term of one year.
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