Why might a saver choose a certificate of deposit over a passbook savings account?

A saver might choose a certificate of deposit (CD) over a passbook savings account because CDs typically offer higher interest rates in exchange for locking funds away for a fixed term. This can result in greater returns on savings. Additionally, CDs often have less variability in interest rates, providing more predictability for long-term savings goals compared to the usually lower rates of passbook accounts. However, it's important for the saver to consider their liquidity needs, as withdrawing funds from a CD before maturity often incurs penalties.