A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years. In exchange, the issuing bank or credit union pays you interest. When you cash in or redeemyour CD, you receive the money you originally invested plus any interest.
Certificates of deposit are considered to be one of the safest savings options. A CD bought through a federally insured bank or credit union is insured up to $250,000.