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A certificate of deposit - an agreed upon rate depending on the amount deposited and length of time the deposit is held by the bank.

From Wikipedia

Certificate of Deposits or CDs are similar to savings accounts in that they are insured and thus virtually risk-free; they are "money in the bank" (CDs are insured by the FDIC for banks or by the NCUA for credit unions). They are different from savings accounts in that the CD has a specific, fixed term (often three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.

In exchange for keeping the money on deposit for the agreed-on term, institutions usually grant higher interest rates than they do on accounts from which money may be withdrawn on demand, although this may not be the case in an inverted yield curve situation. Fixed rates are common, but some institutions offer CDs with various forms of variable rates.

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Q: Which offers the highest rate - a savings account or a certificate of deposit?
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Related questions

What is meant in by term deposits in banking?

The meaning of a Term Deposit in banking is referring to a savings account or a certificate of deposit. This particular savings account or certificate of deposit pays at a fixed rate of interest until given a maturity date.


What is the name of the special savings account that requires the bank and the customer to agree on the savings amount and the time that it will be on deposit?

I believe you are thinking of a certificate of deposit.


What is the difference between a savings account and a certificate of deposit?

In a regular savings account, the funds are always available for withdrawl. As a result, savings accounts generally have a low rate of interest. A certificate of deposit is an investment for a specific amount of time. The funds are not available until the certificate has matured, therefore, it has a slightly higher rate of interest than a savings account.


What is a certificate of deposit?

When you put money in a savings account, you can draw it out at any time. In a certificate of deposit, you agree to leave it in the bank for a certain period of time. They pay slightly higher interest because they know that money will be there for 3 months, 6 months, 1 year, etc. If you draw it out early, they reduce your interest.


Which of these is a type of savings account that is designed to accrue interest for a specific period of time?

certificate of deposit


Which is a type of savings account that is designed to accrue interest for a specific period of time?

certificate of deposit


What are the benefits of a certificate of deposit?

One of the benefits of a certificate of deposit is that you get a high interest rate then if you had a savings account. They are also FDIC insured so if the bank goes under your money is safe.


Do Certificates of Deposit avoid probate?

A certificate of deposit is a type of savings certificate that entitles the owner to collect the balance including interest after its maturity date. A certificate of deposit in and of itself does not avoid probate. However, depending on how the certificate is titled, probate may be avoided by adding a beneficiary to the account. The owner of the certificate can name a "payable on death" beneficiary to the account at the time the certificate is issued.


Do I need a certificate of deposit to deposit money into my account?

You do not need a certificate of deposit (also known as a CD) to deposit money into an account - unless you are attempting to deposit money into a CD account. Most banks only require you to have a regular savings account opened to be able to deposit money into a checking account for free. However, these terms vary by bank depending on which one you are using. Generally speaking, however, you should not have to open a CD to deposit funds into a regular checking account.


What the the advantages and disadvantages of a certificate of deposit?

Certificates of deposit are a good idea because they are a high interest deposit and offer a higher interest rate than a savings account and treasury bills and notes.


Is a savings account a time deposit?

no


Which type of account is typically the most liquid A checking account B savings account C certificate of deposit D exchange traded fund?

A checking account is typically the most liquid.