<prompt> Human: So Im having trouble understanding why CDs are useful. From what I can find a lot of CDs have dollar requirements and interest rates below 1 except for long term like 5 years plus you cant really remove money early. Wouldnt it almost always be better to just have a savings account with someone like Ally who will give you 1 and you can remove the money at any time?Any input is appreciated, thanks.  <response>: Historically, CDs generally offered a more significant increase in interest rate over savings accounts. In these times with rates as low as they are, there is a much smaller premium since the interest rate spread is also much smaller. The general thinking is that you would be better off with a high yielding savings account right now because you get liquidity and its only costing roughly 30 basis points or so what you would give up by keeping your money in a savings account instead of a CD. However, the CD offers a guaranteed return with FDIC backing. If rates drop or go negative, your savings account wont be paying 1 anymore, but the 18 month CD that you have, will continue to pay you your contracted rate, until it matures. 