What is a CD and when should I use one?

A Certificate of Deposit (CD) is a fixed-term savings product that pays a fixed APY for a set period (6 months, 1 year, 5 years, etc.). In exchange for locking up your money, you earn a higher rate than a regular savings account. Use a CD when: (1) you have cash you won't need for the term, and (2) you expect rates to fall and want to lock in today's rate.