A more thorough explanation:

A certificate of deposit (CD) is a document issued by a bank that acknowledges the receipt of money from a depositor and promises to repay the amount with interest at a later date.

For example, if you deposit $1,000 in a CD with a term of one year and an interest rate of 2%, the bank will issue you a certificate of deposit that shows your deposit amount, the term of the CD, and the interest rate. At the end of the term, the bank will return your $1,000 plus $20 in interest.

Certificates of deposit are a low-risk investment option that offer higher interest rates than savings accounts. However, they typically require a minimum deposit and have penalties for early withdrawal.