A certificate of deposit, or CD, functions as a savings account through a credit union or participating bank that provides a fixed interest rate for growth as well as a fixed maturity date that withdrawals can be made on. If you have cash that you won't need throughout the term length, a CD has the potential to pay off in the long run. If you are interested in learning if a CD is the right approach for your retirement or financial planning, the experts at Anchor Financial Group are here to help guide you through the benefits and disadvantages of this popular plan.

As a low-risk retirement option, a CD varies from a traditional savings account in a variety of ways. Most notably, a CD requires you to agree to a term length in which you don't have access to contributed funds without paying a penalty. The longer the term length your CD carries, the higher the interest rate you will earn. However, annual percentage yields will be locked for the duration of the term with few exceptions This varies from a traditional savings account because the funds can be withdrawn at any time with relatively low chances of a penalty.