when is opening a cd a good idea 
cds can be a good idea in several situations a cd may be a good option if you have cash that you don t need now but that you will want within a few years investing in a cd can help you save for a vacation a new home or a car a cd may be a good idea if you want some of your savings invested conservatively it can help you achieve lower risk and volatility than investing in the stock and bond markets one of the downsides of cds is that your money is locked into the investment however that can be a benefit for some savers who worry that they will be tempted to withdraw from their savings the fixed term of a cd and the penalty for early withdrawal provide a deterrent to spending rates are typically higher than savings or money market accountsguaranteed predictable rate of return is less risky than volatile stocks and bondsfederally insured if opened with an fdic or ncua insured bank or credit unioncan help you avoid spending temptations since withdrawing funds early triggers a penaltypenalties for withdrawing funds earlytypically earns less than stocks and bonds over timefixed rate could cost you if interest rates rise during the terminflation can eat away at the value of money locked in at a fixed rate