It's nice to have money in the bank. It's even nicer to have that money earning money. A certificate of deposit (CD) offers a safe way to let your cash work more effectively for you than a savings account. A CD pays a fixed interest rate over a specified length of time. That rate will be higher than you'll earn on a simple savings account. Your bank or credit union is willing to pay you more in interest because they're guaranteed the use of your money for an uninterrupted period of time. If you withdraw your cash before the term is up, however, you'll be hit with penalties!