Certificates of deposit (CDs) are popular safe-haven investments for people looking for a steady return that isn’t tied to stock market performance. But taxes due on the yield from a CD can take a bite out of an investor’s returns since they’re taxed as interest income.
A CD is typically issued by a bank or credit union and pays interest on deposited funds in return for leaving that money in the account for a specific term, ranging from a few months to several years (one, three, or five years are the most common).
CDs are considered low-risk investments, as they …
