An interest-bearing product commonly offered by banks, savings and loans and credit unions. Savers are promised a fixed interest rate if they invest their money for a set period of time, anywhere from three months to seven years. CDs usually pay higher interest than a savings account, which has a variable interest rate. But an early withdrawal penalty is charged for taking money out of a CD prior to the maturity date. Most CDs are FDIC-insured up to $250,000.