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Does stock-market volatility make CDs tempting? Read this first

Certificates of deposit might be thought of simply as a safe haven for cash. But they can pack a punch in the right circumstances.

Since 1967, certificates of deposit (CDs) have outperformed the stock market about 30% of the time on the basis of a 1-year return period, said Brian Karimzad, co-founder and senior vice president of research at MagnifyMoney, citing an upcoming research report from the personal-finance website. The longest period when that occurred was in the early 2000s after the dot-com bubble burst.

That lesson might be of some comfort to investors right now. The Dow Jones Industrial DJIA, +0.76% shed 831 points Wednesday amid the worst sell-off since the market correction that took place back in February.

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