What is cds investing?

CDs (Certificates of Deposit) are a type of investing where individuals deposit a certain amount of money into a bank or credit union for a set period of time, typically ranging from six months to five years.

In return for the deposit, the financial institution pays a fixed rate of interest. Unlike most other types of investments, CDs have a fixed interest rate and a guaranteed return. This means that investors know exactly how much they will earn before they even invest.

CDs are generally considered to be a low-risk investment, as they are insured by the FDIC up to $250,000 per depositor per insured bank. They are an attractive option for investors who want guaranteed returns without taking on the risks of the stock market.

One downside of CD investments is that they can come with early withdrawal penalties if the investor needs to withdraw their funds before the end of the CD's term. Additionally, due to the low interest rates compared to other forms of investing, CDs may not be the best investment option for those looking for high returns.

Overall, CDs can be a secure and low-risk investment, but investors should carefully consider the interest rates and withdrawal penalties before committing their funds.