A certificate of deposit, or CD, is a type of savings account offered by banks and credit unions with a fixed term and interest rate.

Safety Your deposit is insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum limit. Learn more about Deposit Insurance

Predictable Returns Fixed interest rates.

Higher Interest Rates Usually better than regular savings accounts.

Diversification Can be part of a diverse portfolio.

Set Goals Consider your financial goals when choosing a CD. Are you more interested in short-term liquidity or long-term savings?

Consider Laddering If you want a balance between liquidity and returns, consider laddering your CDs, which means opening multiple CDs with staggered maturity dates.

Check Features Look for unique features in CD products, such as step-up rates or add-on options, to see if they align with your investment preferences.

Understand Penalties Make sure you're aware of any early withdrawal penalties associated with the CD you choose and that you can commit to its specific term.

Review Tax Implications Consult a tax professional to fully understand how the CD's interest income will affect your taxes in your unique financial situation.

Diversify Consider integrating CDs as part of your overall financial portfolio to manage risk and optimize returns.