Articles on Stock markets

News, Research and Analysis

Help Center
Investment Portfolios
Investment Terminology and InstrumentsBasicsInvestment TerminologyTradingBondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement Accounts
Personal Finance
Corporate Basics

What is a Certificate of Deposit?

A Certificate of Deposit, commonly referred to as a CD, is a financial product that essentially pays risk-free interest (though typically at very low rates).

CDs are typically offered by banks and credit unions, and usually span in duration from one month to 5 or 10 years. They are FDIC guaranteed up to $250,000, so customers may generally consider them risk-free. But because there is very little risk to purchasing a CD, they also typically pay very low annual interest rates.

In the years following the 2008 financial crisis, when global interest rates were cut to near zero in most developed countries, CDs almost unanimously paid less than 1-2%.

What Investment Choices Do I Have in My IRA?
How Do I Calculate my Net Worth?
What is Commercial Paper?

Keywords: interest rates, risk, Certificates of Deposit (CDs),