<prompt> Human: This was originally posted in the Moronic Monday thread, but it went all week without an answer, so Im making a thread.Im having trouble understanding why anyone would open a CD. It just doesnt seem like you profit off of it very much at all. For example, my credit unions rates: If I deposit 1000 in a 3-year CD, the APY is 0.80, and the interest is compounded monthly. According to this website Id only make 24... what is the benefit of locking down 1000 for three years just to make 24? is it just to keep the value of the money from being eroded by inflation?  <response>: The reason you generally put money into CDs is because you have a set amount of money that you do not see needing for a given amount of time that you may needwant in an intermediate amount of time in the future think house downpayments. You know youll need it in the near future, but dont want it sitting doing nothing as you dont need it quite yet. Still, you want it to be safe for when you DO need it. CDs provide a less lucrative ROR than things like index funds but are much more secure. Also, CD rates havent always been so dismally low. Navy Fed recently had a 5 1 year rate on bonds up to 5k. 