What type of financial product involves a sum of money deposited for a specified time period?

A Certificate of Deposit (CD) is a financial product that requires an individual to deposit a sum of money for a predetermined period, known as the term of the CD. During this time, the funds are typically not accessible without incurring a penalty, which encourages saving by committing the money for the length of that term. In exchange for this commitment, financial institutions generally offer a higher interest rate compared to regular savings accounts, reflecting the reduced liquidity of the funds. This makes CDs a popular choice for individuals looking to earn interest on savings without the need for immediate access to those funds.