How does a Certificate of Deposit (CD) work?

CDs are a low-risk way to save while providing you with a higher rate than a savings account. You pick the term or length of time to keep a lump-sum deposited in the CD, and in return, you are guaranteed a fixed rate. Typically, the longer the term, the higher the interest rate. You’ll earn interest on your deposit until it matures at the end of the term, at which point you can collect the full amount.