how does a CD savings account work
A certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States and elsewhere by banks, thrift institutions, and credit unions. CDs are similar to savings accounts in that they are insured and thus virtually risk free; they are money in the bank..In the USA, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions.hey are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years) and, usually, a fixed interest rate.
Building a nice nest egg goes beyond hard work and frugal living. To maximize your retirement, you want your savings to grow. Certificates of deposit, or CDs, are worth exploring, because they offer higher interest rates than savings accounts and are federally insured up to $250,000.The downside to CDs is the investment and accrued interest are inaccessible for a set time without paying a penalty for early termination.uilding a nice nest egg goes beyond hard work and frugal living. To maximize your retirement, you want your savings to grow. Certificates of deposit, or CDs, are worth exploring, because they offer higher interest rates than savings accounts and are federally insured up to $250,000.