Certificate of Deposits, popularly known as CDs, are time-bound deposits that individuals can make with banks or credit unions. As an investor, you loan money to the bank for a fixed term, and at the end of that term, you receive your capital back along with the interest accrued over the period. A significant aspect of CDs is the 'CD rate', which is the interest rate at which the investment grows over its full term.

Understanding CD rates and their workings are crucial to prudent investment decisions. CD rates are usually quoted in terms of annual percentage yield (APY). It's drawn from the principle of compound interest, where the interest earned over an investment period is added back to the original investment, making the total sum a larger base for computing interest in the following period. This principle makes CDs an attractive investment option, especially for individuals looking for low-risk investments.

The actual CD rates can vary significantly from bank to bank, which is why it's essential for investors to shop around for the best rates. Factors affecting the rate include the duration of the CD term, with longer-term CDs typically offering higher rates; the amount you invest, with larger deposits often attracting better rates; the current state of the broader economy; and competition among banks. Importantly, CDs come with a fixed rate that doesn’t change throughout the term, providing investors certainty about the return they will receive.

Nevertheless, the biggest part of a CD is its rigidity. When you opt for a CD, your funds are essentially locked in for the agreed-upon term. While there are some options for early withdrawal, they usually come with substantial penalties that can eat into, or even exceed the interest earned.

Given the rising popularity of online banking, online banks often offer higher CD rates compared to traditional banks. They are able to do so due to lower overhead costs. As with any financial decision, the key is for individuals to carefully assess their financial goals and needs, and match these with the right CD product.

While CDs may not provide the dramatic returns of other, higher-risk investments, they do offer stability and predictable growth. This factor, in conjunction with a sound understanding of CD rates, can make Certificate of Deposits a valuable component of a diversified investment portfolio.

In conclusion, investing in CDs is not about getting rich quickly, but about growing wealth steadily over time. Understanding CD rates is crucial to align expectations and outcomes, ensuring that your hard-earned money is working for you in the best possible way.