A certificate of deposit, or CD, is a timed savings deposit held by a bank. Unlike regular savings accounts, with a CD, you commit to depositing your money for a certain period of time, or term. Throughout the term, you earn a fixed interest rate, paid out at specified intervals. However, cashing out your CD funds early (that is, before the maturity date) will typically trigger an early withdrawal penalty and lost interest payments.
A CD offered by an FDIC member bank is a safe investment, protected up to standard FDIC limits -- currently $250,000 per depositor per institution.