CD v. Mutual Funds?

I'm totally confused on this one. What's the difference? Which is better?
Does anyone have first hand experience with either or both?

CD is just a bank instrument...you may get 5% on your money.
Mutual funds are held by " investment companies"... depending on the fund you choose you could get from 5% up into the 60% return on your money.
It pays a hundred times over to get educated about funds and " investing" in general.
Yahoo, moneycentral, CNBC all have sites where you can read about " beginning investing".. take a rainy or snowbound week-end and look 'em all over...IT IS NOT difficult, complicated, or " just for geeks"....it is how you " take care of yourself".
You will find lots of people here who will add more info when you get just a little more " into" it.
Good luck.

A CD is a bank account - FDIC insured - that you agree to leave untouched for a specified period. In return, the bank offers a higher interest rate than a "normal" savings account fetches. As for mutual funds, see www.mfea.com.

With a CD you are assured of a certain return on your investment. CDs pay interest like savings accounts. The problem is to find one the pays more than the rate of inflation.

Mutual funds are an investment in the stock market. The value of a mutual fund will go up and down. Right now mutual funds (or better yet, ETFs) invested in foreign stocks are producing generous returns on investment. I expect that to continue for the next few years... until the US economy recovers.

A CD (certificate of deposit) is more like a savings account. You usually get one through your bank. It earns interest like a savings account (but usually slightly higher) but you must commit to a certain period of time to keep the money in the account (i.e. 6 months, 2 years, etc).

A mutual fund is managed portfolio generally invested in stocks or other investment vehicles. You don't usually have to commit to a period of time to keep your money there. However, if it is invested in stocks, it is riskier, as the amount will fluctuate up or down depending on the investments that are made.

With a CD your money is tied up until the maturity date, it has a fixed interest rate (usually). If you buy a 3 month CD it will have and interest rate that will compound for the duration of the CD, you know how much the end value of a CD will be when you buy it. When it matures you can cash it out or reinvest it.

A mutual fund you would buy and hold (don't start off as a market speculator) A mutual fund has a fund manager that is in charge of buying a mix of stocks, bonds and other securities. The value of the mutual fund may go up or down, traditionally given enough time, funds will outperform CDs although in the short term you may see a loss.

As to which one is better completely depends on your goals. If you have a one time small amount of money (say $2,000) and don't have future money to contribute a CD would be the better way to go, because you don't have future support finances. If you plan on making regular contributions and are looking more long term mutual funds are the better option for you. A better scenario is to have a mix of both. Take 100 - your age, that is the percentage of money you want in mutual funds, for example if you are 25, 100-25 = 75% mutual funds
the other 25% would be in CDs and cash.

Depends if you are a short term investor or a long term investor. If you are a short term investor, go with a CD...if you are a long term investor, go with a mutual fund.

CD = lower risk
MF = higher risk