When we talk about CDs we aren't talking about Compact Discs, instead we are referring to Certificate of Deposits. There are long and short term CDs, but for this we will mainly focus on the short term. Long term CDs can have a maturity date upwards of 5 years.
CDs are a savings certificate entitling the bearer to receive interest.
CDs are generally issued by commercial banks, the CD bears a maturity date and a specified interest rate, and can be issued in any denomination, very similar to bonds. Short-term CDs are insured investments with maturity's of one year or less. The most common terms are three months and six months, although many banks allow some customers to pick the length. Furthermore, CDs offer a slightly higher yield than T-Bills because of the slightly higher default risk for a bank, but overall the likeliness of a bank going broke is pretty slim. The major benefit of CDs are the guarantee of principal plus interest.