A certificate of deposit, or CD for short, is a type of long-term savings vehicle that allows you to deposit a certain amount of money for a specific period of time. While you won’t be able to access your funds for that period of time, you’ll receive higher interest payments in exchange.

A certificate of deposit is a smart savings option that allows you to earn higher interest on your funds by leaving it on deposit for a specified period of time (or term). You choose the length of the term. At Needham Bank, CD terms range from three months to five years. Then, you deposit a minimum amount of money and leave it to grow for the duration of that term. When the term is up — in other words, when your CD reaches its maturity date — you’ll get your money back with interest!

If you’re looking for a low-risk nest egg, CDs can absolutely be worth it! CDs get higher interest rates than regular savings, which means more funds for your long-term savings goals.

CDs are more “one-time deposit,” less “piggy bank.” If you don’t want to tie up too much of your savings into a single CD, you can try a CD laddering strategy, where you spread out your investment over multiple CDs with different maturity dates. But if you’re looking for a savings account you can regularly contribute to, we have options!