CDs make financial sense for people of all ages who want a low-risk investment to park cash they don’t plan to use immediately. Maybe you want to use your cash to buy a car or make a down payment on a house pretty soon.

Since you won’t need your cash reserve the day after tomorrow or next week, you’ll likely want that cash to earn a better rate of return than your checking account offers—without taking on too much risk. This is when a CD is useful.

Two factors to consider when deciding whether a CD is ideal for you:

• Your time horizon. When will you need part or all of your cash? Do you have other cash resources to turn to in a pinch? For example, if you don’t expect to need the cash for six months or longer, a CD may be ideal.

• Interest rates. The anticipated direction of interest rates will help you determine how long to tie up your money. If they’re rising (usually when inflation is on the rise), a short-term investment may be best. If rates are falling (usually when the economy is tanking), a longer-term CD may be more beneficial, since you’ll lock in a higher rate.