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, withdrawing funds before this date may result in penalties, making CDs a good option for those who can commit their money for a set time.