Bonds vs. CDs: Which Is the Better Investment?

Bonds and certificates of deposit can both provide interest income and greater predictability than stocks, but they do not work the same way.

A certificate of deposit, or CD, is a time deposit offered by a bank or credit union. You agree to leave your money deposited for a specified period in exchange for interest. Eligible CDs at federally insured institutions receive deposit-insurance protection within applicable limits.

A bond is a debt security issued by the U.S. government, a state or local government, or a corporation. When you buy one, you are lending money to the issuer. In exchange, the issuer promises to pay interest and return the bond’s principal according to its terms.

The better choice in the bonds vs. CDs comparison depends on your time horizon, need for liquidity, tax situation, risk tolerance, and whether you can hold the investment until maturity.

For short-term goals where principal stability is the priority, an insured CD may be easier to understand. Bonds can offer more choices, potential liquidity, and sometimes higher income, but their prices can fluctuate and some issuers can default.

Bonds vs. CDs: Quick Comparison

Feature	CDs	Bonds
Basic structure	Time deposit at a bank or credit union	Loan made to a government or company
Typical issuer	Bank or credit union	U.S. Treasury, municipality, government agency, or corporation
Return	Stated interest rate or APY	Coupon interest, price changes, and yield
Principal at maturity	Returned according to CD terms	Returned if issuer pays as promised
Federal insurance	Eligible deposits may receive FDIC or NCUA coverage	Not covered by FDIC or NCUA deposit insurance
Market-price changes	Traditional bank CD usually does not trade	Bond price can rise or fall before maturity
Early access	Often subject to an early-withdrawal penalty	May be sold, but price can be above or below face value
Credit risk	Generally limited within applicable federal insurance coverage	Depends on the issuer
Interest-rate risk	Limited if held to maturity; reinvestment risk still applies	Market value generally falls when rates rise
Tax treatment	Interest generally subject to federal and applicable state taxes	Depends on whether the bond is Treasury, municipal, or corporate
Best suited for	Defined goals and investors prioritizing insured deposits	Investors seeking income, diversification, or particular tax characteristics

The table presents general differences. Individual CDs and bonds can have additional terms, risks, call features, fees, and tax consequences.

What Is a CD?

A certificate of deposit is a deposit account that generally pays interest in exchange for leaving money at a financial institution for a set term.

Common CD terms include:

Three months
Six months
One year
Eighteen months
Two years
Three years
Five years

At maturity, you typically receive the principal and any unpaid interest according to the account agreement. Many institutions provide a grace period during which you can withdraw or renew the CD.

Traditional CDs often charge an early-withdrawal penalty if you take money out before maturity. The penalty may be expressed as a certain number of days or months of interest. In some cases, the penalty could reduce principal if insufficient interest has accrued.

Before opening a CD, review:

Annual percentage yield
Term
Minimum deposit
Interest-compounding method
Early-withdrawal penalty
Maturity date
Grace period
Automatic-renewal policy
Federal insurance eligibility
Whether the interest rate is fixed or variable
Any callable or special features

A high advertised APY should not be evaluated without considering the term and withdrawal restrictions.

What Is a Bond?

A bond is a debt security. Governments and companies issue bonds to borrow money from investors.

The bond’s key terms may include:

Face value: The amount the issuer is scheduled to repay at maturity
Coupon rate: The stated rate used to calculate interest payments
Maturity date: The date on which principal is scheduled to be repaid
Market price: The price at which the bond currently trades
Yield: A measure of the return based on the bond’s price and payments
Credit rating: An assessment of the issuer’s relative credit risk
Call provision: A term allowing the issuer to repay the bond early

If you purchase an individual bond and hold it until maturity, you may receive its scheduled interest and face value—provided the issuer does not default and the bond is not called or otherwise affected by its terms.

If you sell before maturity, the market price may be higher or lower than the amount you paid.

The Main Types of Bonds

The word “bonds” covers investments with significantly different risk and tax characteristics.

U.S. Treasury Securities

Treasury securities are issued by the U.S. Department of the Treasury and backed by the full faith and credit of the U.S. government.

They include:

Treasury bills
Treasury notes
Treasury bonds
Treasury Inflation-Protected Securities
Floating Rate Notes

Treasury bills mature in one year or less. Treasury notes generally have intermediate maturities, while Treasury bonds have longer maturities.

Treasury securities are not FDIC-insured bank deposits. However, the FDIC explains that Treasury bills, notes, and bonds are backed by the full faith and credit of the U.S. government.

Municipal Bonds

Municipal bonds are issued by states, cities, counties, and other public entities.

Their interest is generally exempt from federal income tax, although exceptions exist. Interest may also receive state or local tax advantages when the investor resides in the issuing jurisdiction.

Tax benefits do not eliminate credit, interest-rate, call, or liquidity risk. Municipal issuers can experience financial problems, and tax treatment varies.

Corporate Bonds

Companies issue corporate bonds to finance operations, acquisitions, and other business needs.

Corporate bonds often offer higher yields than Treasury securities with comparable maturities because investors are accepting corporate credit risk.

A higher yield may indicate greater risk rather than a better investment. If the company defaults, investors could miss interest payments or recover less than the bond’s face value.

Agency Bonds

Government-sponsored enterprises and federal agencies issue various debt securities. The level of government support differs by issuer and product.

Do not assume that every agency security carries the same backing as a U.S. Treasury security.

Are CDs Safer Than Bonds?

An eligible CD held within applicable federal insurance limits at an insured institution generally provides stronger protection against bank failure than an uninsured investment.

The FDIC’s standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. Deposits in the same ownership category at the same bank are combined when calculating coverage.

Federally insured credit unions provide similar protection through the National Credit Union Share Insurance Fund. The NCUA lists basic coverage of $250,000 for common ownership categories, subject to its rules and requirements.

Bonds are not protected by FDIC or NCUA deposit insurance. Their safety depends on the issuer and the bond’s terms.

The relative risk typically differs across:

U.S. Treasury securities
Investment-grade municipal bonds
Investment-grade corporate bonds
Below-investment-grade or high-yield bonds

No bond should be treated as risk-free merely because it makes scheduled interest payments.

FDIC Insurance Does Not Cover Bonds

Buying an investment through a bank does not automatically make it FDIC-insured.

FDIC coverage generally applies to eligible deposit products, including:

Checking accounts
Savings accounts
Money market deposit accounts
Certificates of deposit

It does not cover:

Stocks
Bonds
Mutual funds
Bond funds
Exchange-traded funds
Crypto assets
Annuities

This distinction is important when a bank offers both deposit products and investments.

Always confirm:

Whether the product is a deposit or a security
Whether the institution is federally insured
Whether your total deposits exceed the applicable limit
Which ownership category applies

Bonds vs. CDs: Which Pays More?

Neither bonds nor CDs always pay more.

The return available at a particular time depends on:

Current market interest rates
Maturity
Issuer credit quality
Bond price
CD competition among financial institutions
Liquidity
Call features
Deposit-insurance status
Tax treatment
Economic expectations

A lower-quality corporate bond may offer a higher stated yield than an insured CD because the bond carries more credit risk. A Treasury security may offer a lower yield but greater credit quality and favorable state and local tax treatment.

Compare investments with similar maturity dates and risk levels. Comparing a five-year corporate bond with a six-month insured CD does not produce a fair conclusion.

Because rates and bond prices change, compare current offers on the same day rather than relying on an old rate table.

APY vs. Yield to Maturity

CDs commonly advertise an annual percentage yield, or APY. APY reflects the interest rate and compounding over a one-year period, assuming the money remains deposited under the stated terms.

Bonds may display several different yield measures:

Current yield
Yield to maturity
Yield to call
Tax-equivalent yield

Yield to maturity estimates the annualized return if you buy the bond at its current price, hold it until maturity, and receive the scheduled payments as promised. The calculation assumes coupon payments can be reinvested at the same rate, which may not occur.

For a callable bond, yield to call may be more relevant than yield to maturity because the issuer may redeem the bond before its scheduled maturity.

Do not compare a CD’s APY only with a bond’s coupon rate. The bond’s market price, maturity, call provisions, and yield provide more meaningful information.

How Interest Rates Affect CDs and Bonds

Interest-rate changes affect both products, but in different ways.

Effect on CDs

A traditional fixed-rate CD generally continues paying its stated rate until maturity.

If market rates rise after you open the CD, you may be locked into a lower rate unless you pay an early-withdrawal penalty. If rates fall, your existing higher fixed rate may become more attractive.

Effect on Bonds

Bond prices and market interest rates generally move in opposite directions.

When rates rise, newly issued bonds may offer higher coupons or yields. Older bonds paying lower rates become less attractive, causing their market prices to fall.

When rates decline, an older bond paying a higher rate may become more valuable.

Investor.gov identifies interest-rate risk as the risk that changes in rates affect a bond’s value. If a bond is sold before maturity, its sale price may be more or less than its face value.

Longer-maturity bonds are generally more sensitive to interest-rate changes than similar shorter-maturity bonds.

What Happens at Maturity?

CD Maturity

At maturity, the financial institution generally returns your deposit and any interest owed under the agreement.

The CD may automatically renew if you do not provide instructions during the grace period. The renewed CD may have a different interest rate and term.

Review maturity notices and automatic-renewal terms so your money is not reinvested unintentionally.

Bond Maturity

At maturity, the bond issuer is scheduled to repay the face value and make any final interest payment.

Repayment is subject to the issuer’s ability to meet its obligations. A corporate or municipal issuer can default. A callable bond may also be redeemed before the original maturity date.

If you purchased the bond above or below face value, the amount returned at maturity may differ from your original purchase price.

Liquidity: Which Is Easier to Access?

Neither product should be assumed completely liquid.

Accessing a Traditional CD Early

A bank may allow early withdrawal, but a penalty usually applies. Some CDs do not permit partial withdrawals, and special CDs may have different rules.

The penalty is disclosed when the account is opened. Read it before depositing money you might need unexpectedly.

Selling a Bond Early

A bond may be sold in the secondary market, but there is no guarantee that you will receive its face value or original purchase price.

The price can be affected by:

Interest rates
Issuer credit quality
Time remaining until maturity
Market demand
Trading volume
Call provisions
Dealer markups or markdowns

Some bonds trade frequently, while others may be difficult to sell at a fair price.

Investor.gov notes that bond risks include liquidity risk—the possibility that an investor cannot find a market when attempting to sell.

Early-Withdrawal Penalty vs. Market Loss

The cost of exiting early is one of the most important differences between CDs and bonds.

With a traditional CD, the early-exit cost is normally determined by the account agreement. You may forfeit a stated amount of interest and, depending on the terms and timing, possibly some principal.

With a bond, there may be no predetermined withdrawal penalty, but the bond could sell for less than you paid. That market loss can be larger or smaller than a CD penalty.

Before choosing either product, ask:

When will I need the money?
Is the maturity date aligned with my goal?
Can I hold the investment through a rate increase?
How much could exiting early cost?
Is there an active secondary market?
Does the bond have a call feature?

What Is Credit or Default Risk?

Credit risk is the possibility that the issuer will not make required interest or principal payments.

This risk is important for:

Corporate bonds
Municipal bonds
Certain agency securities
Other non-Treasury debt

Credit ratings can help compare relative risk, but they are opinions rather than guarantees. Ratings can change after purchase.

The SEC’s corporate-bond guidance explains that corporate issuers can fail to make interest or principal payments and default.

Higher-risk bonds often offer higher yields to compensate investors for accepting greater uncertainty. That does not mean the extra yield will be sufficient if the issuer defaults.

What Is Call Risk?

A callable bond allows the issuer to repay the bond before its scheduled maturity date under specified conditions.

An issuer may call a bond when market interest rates fall, allowing it to replace expensive debt with new debt at a lower rate.

The investor receives the amount stated in the call terms but may then have to reinvest at lower prevailing rates.

Some brokered CDs may also be callable. Do not assume that every CD will remain outstanding until its stated maturity date.

For any callable investment, review:

First call date
Call price
Yield to call
Yield to maturity
Frequency of possible call dates
Whether the higher advertised rate compensates for reinvestment risk

Traditional CDs vs. Brokered CDs

A traditional CD is opened directly with a bank or credit union. A brokered CD is generally purchased through a brokerage firm and issued by a bank.

Brokered CDs can provide access to multiple issuing banks and may be tradable in a secondary market. However, they can be more complicated than traditional CDs.

Important differences can include:

Brokered CDs may need to be sold instead of withdrawn early.
The secondary-market price may be below the amount invested.
Some brokered CDs are callable.
Brokerage fees or price adjustments may apply.
Deposit-insurance coverage depends on the issuing bank and account arrangement.
Deposits held at the same issuing bank may be combined when calculating FDIC coverage.

When buying a brokered CD, identify the issuing bank—not only the brokerage—and calculate your total deposits at that bank.

Tax Differences Between Bonds and CDs

Tax treatment can materially change the after-tax return.

CD Interest

CD interest is generally taxable as ordinary interest income for federal purposes and may also be subject to state and local income taxes.

The IRS explains that interest earned on certificates of deposit must generally be included in income.

Treasury Interest

Interest from U.S. Treasury marketable securities is subject to federal income tax but exempt from state and local income taxes.

TreasuryDirect confirms this treatment for Treasury bills, notes, bonds, TIPS, and Floating Rate Notes.

Municipal-Bond Interest

Interest from many municipal bonds is generally exempt from federal income tax. It may also be exempt from state and local taxes when the investor resides in the issuing state, but rules and exceptions apply.

Certain municipal bonds can produce taxable interest or affect other tax calculations. Capital gains from selling a municipal bond are not automatically tax-exempt.

Corporate-Bond Interest

Corporate-bond interest is generally subject to federal and applicable state and local income taxes.

Because taxes vary by security and investor, compare after-tax yields—not only advertised rates.

Comparing a Taxable CD With a Municipal Bond

A municipal bond’s tax-exempt yield may be compared with a taxable investment using an estimated tax-equivalent yield:

Tax-equivalent yield = Tax-exempt yield ÷ (1 − Marginal tax rate)

For example, suppose a municipal bond yields 3.5% and the investor’s relevant marginal federal tax rate is 24%:

3.5% ÷ (1 − 0.24) = approximately 4.61%

In this simplified example, a taxable CD or bond would need to yield approximately 4.61% before federal taxes to match the municipal bond’s 3.5% federally tax-exempt yield.

This calculation does not account for:

State and local taxes
Alternative minimum tax considerations
Capital gains
Medicare surtaxes
Differences in credit risk
Differences in liquidity
Call provisions
Individual tax circumstances

A tax advantage should never be evaluated separately from investment risk.

Bonds vs. CDs for Short-Term Goals

An insured CD may be suitable for a short-term goal when:

The goal has a known date
Principal stability is important
The money can remain deposited until maturity
The deposit remains within applicable insurance limits
The early-withdrawal penalty is acceptable

Examples might include money set aside for:

A vehicle purchase
A home down payment
Tuition
A planned move
A major purchase within several years

Short-term Treasury securities can also be considered. They are marketable, backed by the U.S. government, and receive favorable state and local tax treatment. Their price may fluctuate if sold before maturity.

Do not invest emergency money in a product that prevents you from accessing it when needed. Establishing an accessible reserve should be part of your broader savings plan.

Bonds vs. CDs for Long-Term Investing

Bonds may provide greater flexibility for long-term portfolio construction because investors can select among:

Different issuers
Various maturities
Credit qualities
Tax treatments
Fixed or floating rates
Inflation-protected securities

Individual bonds can be arranged in a maturity ladder or used to produce scheduled income.

However, long-term bonds can be highly sensitive to changing interest rates. Corporate and municipal bonds also introduce credit risk that an insured CD held within coverage limits does not have.

CDs can be used for longer goals, but repeatedly renewing short-term CDs introduces reinvestment risk—the possibility that future rates will be lower when a CD matures.

What Is a CD Ladder?

A CD ladder divides money among several CDs with different maturity dates.

For example, $20,000 might be divided equally among:

One-year CD: $4,000
Two-year CD: $4,000
Three-year CD: $4,000
Four-year CD: $4,000
Five-year CD: $4,000

When the first CD matures, you could use the money or reinvest it into a new five-year CD. Over time, one CD would mature each year.

Potential benefits include:

More frequent access to part of the money
Reduced risk of locking all funds at one rate
A structured reinvestment schedule
Access to longer-term rates without committing the entire balance at once

A ladder does not eliminate early-withdrawal penalties, inflation risk, or reinvestment risk.

What Is a Bond Ladder?

A bond ladder uses individual bonds with staggered maturity dates.

For example, an investor might purchase bonds maturing in one, two, three, four, and five years. As each bond matures, the proceeds can be spent or reinvested.

Potential benefits include:

Scheduled principal repayments
Reduced dependence on a single interest-rate environment
Predictable maturity dates, subject to default and call risk
Greater control over issuer and credit selection

A bond ladder requires more research than a CD ladder. Each bond’s credit quality, call terms, purchase price, yield, and liquidity must be evaluated.

Individual Bonds vs. Bond Funds

A bond fund is not the same as an individual bond.

An individual bond has a stated maturity date when the issuer is scheduled to return face value. A traditional bond fund generally has no maturity date for the investor’s shares because the fund continually buys and sells holdings.

Bond-fund values can rise or fall, and investors can lose money even when the underlying portfolio consists of high-quality bonds.

Bond funds may provide:

Diversification
Professional management
Easier reinvestment
Access to many bonds with a smaller investment

They may also charge expenses and expose investors to ongoing interest-rate and market risk.

Do not compare a bond fund directly with an insured CD without considering these structural differences.

Inflation Risk

Both CDs and conventional fixed-rate bonds can lose purchasing power when inflation exceeds their after-tax returns.

For example, if an investment earns 3% while inflation is 4%, the account balance may increase, but its purchasing power declines.

Longer maturities can increase this risk because the money remains committed to a fixed rate for more time.

Options for managing inflation risk may include:

Choosing shorter maturities
Building a ladder
Avoiding concentration in one maturity date
Considering Treasury Inflation-Protected Securities
Maintaining a diversified portfolio appropriate for the goal

No single approach eliminates inflation risk.

Can You Lose Money in a CD?

You can potentially lose money or purchasing power with a CD when:

The deposit exceeds insurance limits and the bank fails
An early-withdrawal penalty reduces principal
A brokered CD is sold below its purchase price
Inflation exceeds the after-tax return
The product contains misunderstood callable or variable-rate terms
Fraud or an uninsured institution is involved

A CD should be verified as an eligible deposit at a federally insured institution. Do not rely only on an advertisement or a broker’s description.

Can You Lose Money in Bonds?

Yes. Bond investors can lose money when:

Interest rates rise and the bond is sold below its purchase price
The issuer defaults
The issuer’s credit rating declines
The bond is called and proceeds must be reinvested at a lower rate
Inflation reduces purchasing power
The bond is difficult to sell
Fees or price markups reduce the return
A bond fund’s share price declines

Holding an individual bond until maturity can reduce concern about interim price changes, but it does not eliminate default, call, inflation, or opportunity-cost risk.

How to Choose Between Bonds and CDs

Consider these questions before deciding:

When Will You Need the Money?

Choose a maturity date that occurs before the money is needed. Avoid relying on an early sale or withdrawal.

How Important Is Federal Insurance?

If deposit insurance is a priority, confirm that the CD is eligible and remains within the applicable limits. Bonds are not FDIC- or NCUA-insured.

Can You Accept Price Fluctuations?

Individual bond prices can change daily. A CD balance generally does not fluctuate in the same manner.

What Is the After-Tax Return?

Compare CD interest, Treasury interest, municipal-bond tax treatment, and corporate-bond income based on your circumstances.

What Risks Produce the Higher Yield?

A higher bond yield may reflect credit, call, liquidity, or interest-rate risk. A high CD rate may come with a longer term or restrictive withdrawal rules.

Do You Understand the Product?

A traditional insured CD is generally simpler than a callable corporate bond or brokered CD.

Does It Match Your Risk Profile?

Your selection should align with your capacity and willingness to accept losses. Reviewing your investment risk tolerance can help you distinguish an attractive yield from a risk you cannot comfortably manage.

When a CD May Be Better

A CD may be more appropriate when:

You want eligible federal deposit insurance
You have a defined short- or medium-term goal
You can leave the money untouched until maturity
You prefer a simple fixed return
You do not want daily market-price changes
The CD’s APY is competitive for its term
The deposit fits within applicable insurance limits

When a Bond May Be Better

A bond may be more appropriate when:

You want access to a wider range of maturities
You understand credit and interest-rate risk
You want Treasury tax treatment
A municipal bond may fit your tax circumstances
You need potential secondary-market liquidity
You want to construct a diversified income portfolio
You can evaluate yield to maturity and call provisions
You are willing to accept changing market prices

Can You Own Both Bonds and CDs?

Yes. The decision does not have to be all-or-nothing.

An investor could use:

Insured CDs for a known near-term expense
Treasury securities for government-backed income
Municipal bonds for potential tax advantages
High-quality corporate bonds for additional yield
Stocks or stock funds for longer-term growth

The appropriate mix depends on the goal, investment horizon, tax situation, and tolerance for risk.

Diversification cannot guarantee a profit or prevent every loss, but it can reduce dependence on a single issuer, maturity, or investment type.

Common Mistakes When Comparing CDs and Bonds

Comparing APY With a Bond’s Coupon Rate

Use appropriate yield measures and account for the bond’s market price.

Ignoring Deposit-Insurance Limits

Multiple accounts at the same bank do not automatically receive separate coverage. Ownership categories and total eligible deposits matter.

Assuming Every Bond Is Safe

Corporate and municipal issuers can default, and bond prices can decline.

Ignoring Early-Exit Costs

A CD may charge a penalty, while a bond may have to be sold at a loss.

Choosing Only the Highest Advertised Rate

Higher returns can reflect longer lockups, lower credit quality, call risk, or other restrictions.

Overlooking Taxes

The highest pretax yield may not provide the best after-tax result.

Ignoring Call Provisions

A callable bond or CD may be repaid when reinvestment opportunities are less attractive.

Confusing Individual Bonds With Bond Funds

Bond funds do not ordinarily promise to return a fixed face value to shareholders on a specific maturity date.

Using Emergency Savings

Money needed unexpectedly should generally remain accessible rather than being committed to an unsuitable maturity.

Frequently Asked Questions

Are CDs better than bonds?

CDs may be better for investors prioritizing federal deposit insurance, simple terms, and a known maturity. Bonds may be better for those seeking more choices, potential liquidity, or particular tax treatment. Neither is universally better.

Are bonds safer than CDs?

Eligible CDs within FDIC or NCUA limits generally have federal deposit-insurance protection. Bonds are not deposit-insured. Treasury securities have U.S. government backing, while corporate and municipal bond risk depends on the issuer.

Do bonds usually pay more than CDs?

Not always. Available yields depend on maturity, market rates, taxes, liquidity, and credit risk. A higher yield often indicates additional risk or restrictions.

What is the difference between Treasury bonds and CDs?

Treasury bonds are marketable U.S. government securities with long maturities. CDs are bank or credit-union deposits with specified terms. Treasury interest is exempt from state and local income taxes, while CD interest generally is not.

Are CDs affected by interest rates?

Yes. A fixed-rate CD continues paying its stated rate, but changing market rates affect its opportunity cost. A CD opened before rates rise may pay less than new offers.

Do bond prices fall when interest rates rise?

Generally, yes. Existing lower-rate bonds become less attractive when new bonds offer higher rates, causing their market values to decline.

Can I sell a bond before maturity?

Often, yes, but the available price may be higher or lower than the purchase price or face value. Some bonds have limited liquidity.

Can I withdraw money from a CD early?

Many traditional CDs allow early withdrawal subject to a penalty, but terms differ. Some products impose greater restrictions.

Are brokered CDs FDIC-insured?

A brokered CD may qualify for FDIC insurance when it is an eligible deposit at an FDIC-insured issuing bank and coverage requirements are satisfied. Verify the issuing institution, ownership records, and your total deposits at that bank.

Are municipal bonds tax-free?

Interest from many municipal bonds is generally exempt from federal income tax and may receive state or local benefits. Exceptions apply, and capital gains can still be taxable.

Which is better for retirement: bonds or CDs?

Either may play a role. The answer depends on income needs, time horizon, tax treatment, liquidity, inflation risk, and overall asset allocation.

Final Thoughts

The bonds vs. CDs decision comes down to protection, flexibility, risk, taxes, and timing.

An eligible CD within federal insurance limits can provide a predictable return and principal protection against an insured institution’s failure. Its main limitations include early-withdrawal penalties, reinvestment risk, and the possibility that inflation exceeds its return.

Bonds provide a wider range of issuers, maturities, yields, and tax characteristics. However, bond prices can fall, issuers can default, and callable bonds may be repaid earlier than expected.

Compare investments with similar maturities, calculate their after-tax returns, and understand why one offers a higher yield. Most importantly, match the maturity date to the goal so you are not forced to withdraw a CD early or sell a bond during unfavorable market conditions.

This article is for general educational purposes only and does not constitute financial, investment, legal, or tax advice. Rates, yields, insurance rules, tax treatment, and product terms can change. Review official disclosures and consider consulting a qualified financial or tax professional before investing.