With a Certificate of Deposit (CD), the maturity date is fixed as is the interest rate.
CDs do offer a financial advantage in terms of assured returns and security via the FDIC net. However, you can’t use the moneys before maturity. In case you opt for an early withdrawal, an early withdrawal penalty is levied.
As an investor, your goal is to maximise returns, taking due factoring for liquidity as well. Based on your estimated cash needs, you can choose between short term and long term CDs. CD rates vary depending on the duration. A long term CD will offer you the highest interest rate, while a short term CD will give you a comparatively lower rates of return.
How To Balance Risk and Return