A certificate of deposit or CD is an investment that allows you to set aside a certain amount of money in a protected account for a specific time period. The time period set is usually anywhere from three (3) months to five (5) years. Upon arrival of the agreed date, the money can be retrieved either to be returned for a new CD or transferred to a savings or investment account.
This type of bank account is considered a very safe investment although the money is practically illiquid during the agreed time. Money in a CD may not be removed from the bank account until the expiration of the term. Collection of interest gained from the lump sum deposit may be allowed but the terms remain the same. This will be to the benefit of the account holder as the money remains intact for future use.
