A certificate of deposit is known as a CD and is used by consumers to save money for longer periods of time.

The federal government backs up to $250,000 of a CD's funds.

Once a CD is opened, you can't add funds. After opening a CD, you can't add an IRS refund or employer bonus.

Pros of CD Accounts Earn interest. Variety of term lengths. Safe investment. No monthly fees.

Cons of CD Accounts Cannot withdraw until end of term. Limits on deposits.

How to Find the Right CD Rate for You Annual percentage yield Term lengths. Penalties. Minimums

Banks and credit unions usually charge a penalty for early CD withdrawals.

A CD is used to save money for a future vacation, large purchase, or down payment on a vehicle or home.