A CD is a time deposit: you commit money for a set period (three months to five years or longer) in exchange for a fixed interest rate — usually a bit higher than a plain savings account.
Withdraw early and you'll typically pay a penalty of several months' interest. CDs work well for money you know you won't need until a specific date, like a down payment.
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Talk to Auri →Frequently asked questions
What is a CD ladder?
Splitting money across CDs of different terms (say 1, 2, 3, 4, 5 years). As each matures you reinvest into a new 5-year CD — smoothing out rate changes and keeping some cash accessible each year.
Related terms
APY (annual percentage yield)
The yearly return on savings after compounding is factored in, expressed as a percentage.
High-yield savings account
A savings account that pays significantly higher interest than a traditional bank account.
Emergency fund
Cash set aside to cover surprise expenses without touching investments or taking on debt.
Bond
A loan you make to a company or government in exchange for regular interest payments.