When you open certificates of deposit (CDs), you’ll typically earn more interest than a checking, money market, or savings account. You’ll have to wait for a predetermined term before withdrawing your money penalty-free — CDs are a long-term deposit.
But, in the meantime, you can rest assured that your CD’s funds are safe if you’ve opened an account with a bank insured by the Federal Deposit Insurance Corporation (FDIC). Even in the unlikely case of a bank failure, the government will protect deposits up to $250,000. Plus, CDs offer fixed rates, meaning your annual percentage yield (APY) or interest rate stays the same throughout the CD’s term.
