Explore the Key Differences Between CDs and Bonds
The Comparison of CDs and Bonds
Investors often face choices between CDs and bonds. Both have distinct characteristics that appeal to different financial goals.
What Are CDs?
CDs, or Certificates of Deposit, are time deposits offered by banks with fixed annual percentage yields (APYs) for a set term. They are considered low-risk investments.
What Are Bonds?
Bonds are loans made to institutions or governments that pay interest over time. They can vary significantly in risk and return.
Making the Right Choice: CDs or Bonds?
Your choice between CDs and bonds should be influenced by your risk tolerance and investment horizon. Short-term investors may prefer CDs, while long-term investors might lean towards bonds.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.