|
A Certificate of Deposit (CD) is a type of deposit account that pays higher interest than regular savings. In exchange for the higher fixed interest rate you must invest a particular amount of money for a specific amount of time. The fixed interest rates that you receive increase with the amount of money deposited and the duration of the deposit. Because these investments are more stable, however, the interest rate that you will earn is generally lower than the historical rate of return in the equities (stock) market. Of course, unlike the stock market, your investment is guaranteed to rise in value (and even protected by insurance, up to a certain limit), should the bank fail.
|
