Certificates of deposit for amounts less than $100,000 are called small-savings CDs. They were created so that small investors could participate in the certificate market. Most of them are used like savings accounts, although the length of their maturities and amount of money invested determine their rates. The minimum deposit, the interest/dividend payment schedule, and the methods of compounding differ from institution to institution. Be sure to check these factors out carefully prior to investing.

Numerous individual types of certificates serve different purposes within the category of small-savings CDs. For example, for a minimum deposit of $10,000, you can buy Treasury-rate CDs. The weekly rates on six-month Treasury bills determine their rates.

Small-savings CDs might be a good vehicle for emergency funds or for saving for short-range (less than three years) financial goals.