Certainty has a price, and it is flexibility

Withdraw before maturity and you forfeit some interest — commonly a few months' worth on short terms, and up to a year or more on long ones.

Called

Early withdrawal penalty.

How it is calculated

Usually as a number of days' or months' interest, not as a percentage of the balance. Terms are set by the bank and stated at opening.

The catch

If you break a CD very early, the penalty can exceed the interest earned, meaning you get back less than you deposited. No-penalty CDs exist and pay a somewhat lower rate for the privilege.

Split the money across several CDs maturing at different times, so something comes available regularly instead of everything being locked at once.

Called

A CD ladder.

What it solves

The two things you cannot otherwise have at once: regular access to part of the money, and the higher rates on longer terms.

The catch

More accounts to track and more renewal dates to catch. It also loses much of its point while the curve is inverted, since short terms currently pay as much as long ones.

At maturity most CDs roll into a new term automatically, at whatever rate the bank is offering that day — often a poor one.

Called

Automatic renewal, with a grace period.

The grace period

Commonly around ten days after maturity, during which you can withdraw, add money, or change the term without penalty.

The catch

Miss it and the money is locked into a new full term. Diary every maturity date the day you open the account.

A money market fund is an investment. A money market account is a deposit. One word apart, completely different protection.

Money market account

Held at a bank or credit union, FDIC or NCUA insured up to the limits.

Money market fund

Held at a brokerage, invested in short-term debt. Not deposit insured, though it may carry SIPC protection against broker failure, which is a different thing from protection against loss.

Why it matters

Yields on funds have often exceeded deposit rates, which is precisely why the distinction gets glossed over in marketing.

Bought directly from the U.S. Treasury rather than a bank. Different rules on access, tax, and how the rate is set.

Where

TreasuryDirect.gov. There is no commission and no intermediary.

Access

Series I and EE bonds generally cannot be cashed for the first twelve months, and cashing before five years forfeits some interest.

Tax

Interest is exempt from state and local income tax, which changes the comparison against a CD depending on where you live.

A CD cannot lose nominal value. It can still lose purchasing power if inflation runs above the rate you locked in.

Called

Inflation risk, and reinvestment risk — the chance that when your CD matures, rates are lower than they were.

Against investing

Stocks and bonds can fall in value, and have historically produced higher long-run returns than deposits. Those are different risks, not more or less of the same one.

The usual dividing line

Money you will need on a known date tends to go in deposits; money with a long and flexible horizon tends to go into investments. Where your own line sits is a question for a fiduciary adviser, not a comparison page.