Certificates of deposit are a great savings tool. They generally pay higher interest rates than a regular savings account would, and the interest rate is locked in for the life of the CD. That protects you from drops in interest rates.
On the other hand, if interest rates go up, you can't take advantage of the rising rates with your money locked up in a CD. Because of that, some people don't like having their money tied up in them.
Banks are responding with a variety of CD options. You can find CDs with good interest rates that have done away with the drawbacks of a conventional CD.
Here are three of the more popular alternatives to the traditional CD and how they work.