Certificate of deposit
A bank deposit that pays a fixed rate for a set term, like 6 months or 5 years, with a penalty if you take the money out early.
With a CD, you agree to leave money in the bank for a set time. In return, the rate is locked for the whole term. CDs at insured banks are covered by FDIC insurance.
The early withdrawal penalty is often a few months of interest, and it varies by bank. That makes a CD a good fit for money you will not need until a known date, and a poor fit for an emergency fund.
Example
$5,000 in a 12-month CD at a 4.5% APY earns $5,000 × 4.5% = $225 by the end of the term.