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Certificates of deposit qualify as investments with fixed, set returns
CD interest rates are influenced by market conditions, and many CDs require an early-withdrawal penalty if funds are taken before maturity.
Yahoo Finance explains that a certificate of deposit, while structured as a bank account, is also considered an investment because it pays a return over a set period.
The outlet says CDs fall under the fixed income asset class, typically offering low but predictable returns, with fixed annual percentage yields locked in when the account is funded.
According to Yahoo Finance, CDholders generally know the amount of interest they will earn upfront when the CD has a fixed APY, unlike investments such as stocks or real estate where returns are not guaranteed.
The outlet also notes that withdrawing early usually triggers a penalty set at the start, often equivalent to several months of interest, and it contrasts this with how other assets typically charge fees differently rather than an early withdrawal penalty.