Is starting a cd smart?

A CD is a good investment if your going to use money that you dont need liquid right now. A CD will lock up your money until the term is over and if you decide you need that money sooner you can withdraw it but there will be a penalty (usually about the same amount of interest you've occured). CD's occur interest in two ways..APR and APY..Annual percentage rate and Annual percentage yield. I believe the APR is what you will get daily/monthly on the amount you invest. Then come the end of your term you will get the APY on what your balance is then including the interest you have earned. CDs are good because typically they have higher interest however with todays economy the rates are really low! But one other option available if your not interested in the 1% rate is to open a Money Market account. Money Market accounts have lower rates then a CD but higher then a savings account. And money market accounts dont lock up your money for any length of time. With the money still be liquid that means that whenever the rates go up or you see one that might be of some interest to you, you can take your money (and any interest) and roll it into a CD. Hope this didnt confuse you any more lol..