What Is a Certificate of Deposit (CD)? A Smart, Low-Risk Way to Grow Your Savings

A Certificate of Deposit (CD) is a low-risk savings option that helps you earn predictable, fixed interest over a set period of time. If you’re looking for a safe place to grow money that you won’t need right away, a CD can offer higher interest rates than a traditional savings account — with the confidence of FDIC insurance. Below, we break down how CDs work, their benefits, and when they might be right for you.

What is the difference between a CD and a savings account?

A CD is similar to a savings account in that your money earns interest, but there are several key differences that set it apart from checking and savings accounts:

Fixed interest rate and term length: Your rate is locked in for a specific period, typically ranging from six months to five years.
Higher earning potential: CDs generally offer higher interest rates than standard savings accounts.
No additional deposits*: Once your CD is opened, you cannot add more funds.
Early withdrawal penalties: Accessing your money before maturity may reduce your earnings through penalties.

Because of these features, CDs are best suited for funds you can set aside without needing immediate access.
* EXCEPTION: If you invest in Prevail Bank’s 18-month CD or in its IRA CDs, you can add $500 or more to those balances at any time during the life of the CD.

What are the Benefits of a Certificate of Deposit?

A Certificate of Deposit offers a low-risk way to earn predictable interest by locking in a fixed rate for a set period of time. Because the rate does not change during the term, CDs provide stability and peace of mind.
Key benefits include:

Fixed interest rates for predictable earnings
Multiple term length options to match your savings goals
FDIC insurance up to $250,000 per depositor

What Happens When a CD Matures?

When your CD reaches maturity, you’ll have 10 calendar days (Note: This may differ between financials.) to withdraw your funds without penalty. If no action is taken within that window, the CD will automatically renew for the same term length — though the interest rate will likely change based on current market conditions.

Should You Choose a Savings Account or a CD?

This doesn’t have to be an either/or decision. Savings accounts offer flexibility and easy access, while CDs provide higher, locked-in returns for long-term goals. The right choice depends on your timeline and financial priorities.

A Prevail Bank banker can help you decide how to balance both options effectively.

Is a Certificate of Deposit Right for You?

A Certificate of Deposit is a great option if you want to:

Earn more interest than a traditional savings account
Lock in a fixed rate for long-term savings
Protect your money from market fluctuations

Explore Prevail Bank’s Certificate of Deposit options to find the right fit for your financial goals. We offer specials throughout the year.

Prevail Bank – Member FDIC