A certificate of deposit (CD) is a type of savings account offered by banks and credit unions that allows you to deposit money for a fixed period, usually ranging from a few months to several years. In return for keeping your money locked away, the bank pays you a higher interest rate compared to regular savings accounts. When the term of the CD ends, known as the maturity date, you can withdraw your initial deposit plus the interest earned. However, if you take out your money before this date, you may face penalties, which can reduce your earnings.