What banking product pays a fixed interest rate for keeping money deposited until a specified maturity date?

A certificate of deposit pays a fixed interest rate for keeping money deposited until a specified maturity date.

A certificate of deposit, or CD, is a time deposit offered by banks and other financial institutions. The customer agrees to leave a stated amount untouched for a defined term, such as three months, one year, or five years. In return, the institution generally pays interest.

Withdrawing money before maturity may trigger an early-withdrawal penalty, although the exact rules depend on the product and country. Some CDs have variable rates or special withdrawal terms, so “fixed rate” describes a common form rather than every product sold under the name.

CDs differ from savings accounts because they normally impose a time commitment. They also differ from bonds: a CD is a bank deposit, while a bond is debt issued by a company, government, or other entity. In the United States, eligible CDs are commonly covered by FDIC deposit insurance within applicable limits.