A certificate is a fantastic savings vehicle because it has a fixed date of maturity, fixed interest rate, and guaranteed earnings. Most certificates require a minimum deposit to open and may offer tiered rates based on the size of the deposit. The interest you earn depends on the interest rate, the term of the deposit, and the compounding method. Deposits that compound with greater frequency will have a higher Annual Percentage Yield (APY). Your APY is the effective annual rate of return once the effect of compounding interest is factored in. Most certificates restrict access to the funds until the maturity date is reached, so only invest funds you won't need immediate access to.