A certificate of deposit, or CD, is a good place to put money that you know you won’t need to get at for a given period of time. CDs can be bought for as short as three-month terms, or as long as 7 years. The longer you can leave the money in a CD, the higher the interest rate.

You should be very sure you won’t need money you are investing in a CD before its term expires. If you do withdraw your money early, you will be charged a hefty penalty fee. When shopping for a CD, don’t forget to ask the following questions:

• Is the institution insured? Credit unions should be insured by the NCUSIF, and every credit union in Michigan is. A bank should have Federal Deposit Insurance Corp. (FDIC) insurance.
• What is the term of the CD: how long must I leave my money in it?
• What is the interest rate?