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Certificates of deposit (CDs) are among the safest investments out there. They're available from banks and credit unions, and they tend to pay more than savings accounts and money market accounts. The main drawback to CDs is that you have to lock your money up in order to earn the higher interest rate.

Jumbo CDs have higher denominations than regular certificate of deposits, and allow investors to deposit a certain amount of money and receive interest. These investments are considered low-risk, stable investments for large investors. They typically pay interest at a higher rate than lower denomination CDs.

A CD or certificate of deposit is a savings certificate with a fixed maturity date which almost every bank offers, and the individual receives a fixed interest for the same.

Interest earned on a CD may be paid to another account or it can be reinvested in the total balance. Regardless of how the interest is credited back to the investor, it is considered taxable for both state and federal tax purposes.

A CD involves an arrangement in which the money stays in the bank for a certain length of time, and you earn a promised return, and functions as a share certificate at credit unions.

For example, $20,000 invested in a 12-month CD at the national average interest yield of 0.21% would earn $42 in interest by the end of one year. Not much, but it amounts to more than three times what you'd earn if your money remained in an average savings account that year.