Certificate of deposit
From Wikipedia, a free encyclopedia written in simple English for easy reading.
A certificate of deposit (CD) is a way to store money at a bank or credit union. A CD is written for a period of time: usually between three months and five years. The person who wanted the CD—the consumer—agrees to give the money to the bank for that period of time and may not take the money back until the time has expired. If the consumer does take the money back, he will usually have to pay the bank some money—a penalty. After the time has passed, the money, plus a lot of interest, is given back to the consumer. People open CDs istead of savings accounts because the interest is higher. A certificate of deposit (which is common only in the United States) is similar to a time deposit.
