A fixed-rate CD typically offers a higher rate than a liquid CD, also known as a penalty-free CD. A liquid CD allows you to withdraw your funds early without paying a penalty. You may earn more total interest with a fixed-rate CD than with a liquid CD if you leave your money invested longer. This assumes overall interest rates don't go up and cause you to miss out on potentially better investments. If rates rapidly increase, a liquid CD could earn more over time if you remove your money and reinvest it in a higher-rate CD. In addition, if you need your money earlier than you anticipated, you can withdraw without paying a penalty.