A certificate of deposit (CD) is a financial product similar to a time deposit that is offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a fixed cash amount untouched for a predetermined period of time. With CDs, banks usually offer higher interest rates than they do on accounts that can be withdrawn from on demand. Unlike savings accounts, CDs have a fixed term and usually, a fixed interest rate. A customer is expected to hold the CD to maturity, at which time they can withdraw the deposit and receive their interest payment. If a customer withdraws their CD early, they are usually required to pay a penalty.