That makes them a useful tool for extra cash you have earmarked for a medium-term expense like a car purchase or home renovation. Six-month CDs can help you benefit from favorable rates without making a yearslong commitment. In return, they generally offer you higher interest rates.

Unlike traditional savings accounts, however, CDs require you to lock up your money for the length of the term. Rates for short-term investments, including CDs, savings accounts and more, have grown steadily more generous in recent months with the Federal Reserve hiking interest rates to fight inflation.ĬDs resemble savings accounts in that you can purchase them at a local bank (or online bank or credit union) and they carry Federal Deposit Insurance Corp. If you have a little extra money to set aside, a six-month certificate of deposit can help you earn a great interest rate without locking up your money for the long term.