CDs and bonds are popular fixed-income investments, each with its own characteristics. CDs, offered by banks and credit unions, involve lending money for a fixed period and earning interest. Bonds, issued by governments or corporations, raise capital by borrowing from investors for a specified period. CDs generally have shorter maturity periods, ranging from months to years, while bonds typically have longer maturity periods, spanning years to decades. Understanding these variations helps determine the right investment option for you.
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