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Certificate of Deposit (CD)

A CD is another type of account that banks offer that gives you a place to make some money off of your cash. With CDs, you promise to keep your money in the bank for a set period of time and the bank pays you interest. Interest rates are going to be higher with CDs than with savings accounts because with CDs, your money is typically locked in for the duration, and if you take money out early, you get hit with a penalty. On top of that, the government insures your CD up to $250,000. Because of this, CDs are typically a safe investment.


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