Unlike that outdated equipment that you used to listen to your music, this type of CD can make your life a little easier. Certificates of deposit, or CDs, are a longer-term, more permanent type of savings account designed to help you save more.
Earn more interest.
Using your money to open a CD requires a bit more of a commitment from you than the traditional savings or money market account. In exchange, you’ll likely earn more interest on your funds.
Greater incentive to save.
Because CDs come with early withdrawal penalties, we bet that you’re more likely to keep your funds in the CD until it “matures,” or reaches the end of the contract – ultimately meaning more money earned from interest for you.
Less temptation to transfer.
CDs are designed to help you save money over a set amount of time, so your dollars will need to “stay put.” As a result, CDs cannot be linked to a checking account or credit or debit card for overdraft or “rainy day” transfers.