A CD, or certificate of deposit, is a type of savings account offered by banks. It’s a low-risk investment option, and the interest rate is usually higher than what you’d find with a regular savings account.

When you invest in a CD, you agree to leave your money with the bank for a set period of time, typically six or 12 months. In return, the bank pays you a higher interest rate than you would get with a regular savings account.

The interest rate on a CD is fixed, which means it won’t change during the term of the investment. …