Question 1

What is a certificate of deposit?

Accepted Answer

A CD is a time deposit that pays a fixed interest rate for a specific term. Early withdrawals typically incur penalties. CDs offer higher rates than regular savings accounts.

Question 2

Are CDs a good investment?

Accepted Answer

CDs are low-risk, FDIC-insured investments ideal for funds you will not need during the term. They offer guaranteed returns but may not outpace inflation.

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