A 12 month CD is a short term deposit that offers a higher interest rate than any standard savings bank account or money market account. A 12 month CD means that the money is locked in for a period of 12 months. Investors will not be able to access these funds for the entire duration. However, they can prematurely withdraw the amount by paying a penalty. Investors can choose to withdraw the deposit after the period of 12 months or can also roll it over for another year.