Certificate of Deposit Definition

What is a Certificate of Deposit (CD)?

A Certificate of Deposit (CD) is a type of financial investment, were you deposit your money for a fixed period of time, in exchange of an interest.

CDs are extremely safe and simple investments. Almost risk free.

You are basically lending money to the bank for a fixed amount of time, after which, you get your capital plus an interest.

There are different types of certificate of deposit. Some give you a better rate if you deposit more money for example.

Money invested on CDs are covered by the FDIC deposit insurance ($250,000).