What is a CD?

CD stands for Certificate of Deposit. A CD is a type of savings account that is opened under the agreement that you will not withdraw the funds until the specified term is reached (the day the term is reached is known as the "maturity date").

In exchange for this agreement, CD interest rates are often higher than that of non-term deposits. However, if CD funds are withdrawn before the maturity date, the withdrawal is subject to an early withdrawal penalty.