A certificate of deposit (CD) requires larger money contributions than usual but offers a higher interest rate than traditional savings accounts.
Certificate of deposit (CD) is the account option that may require larger money contributions but offers a higher interest rate than traditional savings accounts. With a CD, you deposit a specific amount for a set period, and the bank pays a higher interest rate in return.
CDs usually have terms ranging from a few months to several years, providing an opportunity for higher returns compared to regular savings accounts. However, withdrawing money before the term ends can lead to significant penalties.
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