Glossary

A Certificate of Deposit (CD) is a type of time deposit offered by banks and credit unions. 💰

When you invest in a CD, you agree to deposit a fixed amount of money for a specified term, usually ranging from a few months to several years. In return, the financial institution pays you a predetermined interest rate, which is typically higher than a regular savings account.

For example, if you invest $5,000 in a 1-year CD with a 2% annual interest rate, you'd earn $100 in interest at the end of the term.

Fun fact: CDs are considered to be one of the safest investment options, as they're insured by the government (up to certain limits) in many countries. 🛡️ This means that even if the bank or credit union fails, your deposit and earned interest are protected!