Investment Glossary
Certificate
of Deposit (CD’s) - An FDIC insured investment available at banks, as
well as savings and loan institutions. CD's are typically short term
investments, usually 6 months to 5 years, in which the issuing bank agrees to
pay back your money at the specified time plus interest.
CD's are much like bonds in this respect but are considered much safer
because of being FDIC insured. Consequently, they also don't pay as much in
interest. Also keep in mind that banks charge a penalty for early withdrawal.
