A certificate of deposit (CD) is a type of savings account offered by banks and credit unions that allows individuals to deposit money for a fixed period, usually ranging from a few months to several years. In return for locking in their funds, depositors earn a higher interest rate compared to regular savings accounts. When the term of the CD ends, known as the maturity date, the depositor can withdraw the initial amount plus the earned interest. Early withdrawal may result in penalties, making CDs a suitable option for those who can set aside money for a specific time without needing immediate access.