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Certificate of Deposit (CD)
Below, you'll find a definition of this investing term...

Definition: This is much like a bond from a bank because you give a bank money for a specified amount of time and they agree to pay you back at that time, plus interest.  The length of a CD usually varies from one month to five years.

TeenAnalyst Advice: If you have a lot of money in the bank, CD's allow you to put that money to work for you.  They're also nearly risk-free investments.  However, their interest rates vary with the current market interest rates.  At times, you may receive a very very low interest rate.

We recommend that if you' have a lot of money to consider investing it in another investment such as stocks and bonds instead.

 

Related Sections on Our Website

Investing - Learn more about investing basics and strategies.

Bonds
- Learn about investing in bonds.

 

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