Certificates of Deposit 
- Short term and long term
- Automatically renewable
- Penalty for early withdrawal
Certificate of Deposits or CDs are similar to savings accounts in that they are insured by the FDIC. They are different from savings accounts in that a CD has a specific fixed term, varying from three months to five years. Also a CD has a fixed interest rate. It is intended that the CD be held until the maturity of the term, at which time the money may be withdrawn or rolled over into the same term or a different term. Interest is generally paid monthly, quarterly, yearly or at maturity. CDs earn different rates for different terms. If a CD is withdrawn before the end of the term there will be a penalty imposed.
