What's the difference between a CD and a regular savings account?

The main difference is that a CD locks your money away for a fixed period while a savings account keeps it accessible whenever you want. With a CD, you agree to leave your cash untouched until the term ends - could be 3 months, a year, 5 years, whatever. In exchange, the bank pays you a higher interest rate than a regular savings account would. If you pull the money out early, you'll get hit with a penalty that eats into your earnings.

A regular savings account is way more flexible. You can deposit and withdraw whenever you feel like it with no penalties. The tradeoff is that interest rates are usually lower, sometimes barely keeping up with inflation. It's the account you'd use for an emergency fund or money you know you'll need to access, whereas a CD is better if you have cash sitting around that you won't touch for a while and want to make it work harder for you.

So pick a CD if you've got a lump sum and can commit to leaving it alone for the term length. Pick a savings account if you need liquidity and peace of mind knowing your money's there whenever life throws something at you.