What is a good interest rate for a CD?

A bond is a part of a loan to an entity. Someone buying a bond when it is first issued can be compared to someone putting money in a certificate of deposit (CD). It is locked away and every quarter a check is sent to the lender for the interest paid, at a certain interest rate (for example 5 %). If the lender holds the bond until it matures (for example after a year), then the lender gets his money back plus 5 % interest and there is no interest rate risk. Unlike a CD however, a person can't terminate their bond early if they need their money (with a CD one can do this with a penalty). The only thing a person can do is sell the bond to someone else. Assuming interest rates on comparable bonds have remained the same, a person is likely to buy the bond at a discounted price which reflects the interest payments already given to the seller (so that the seller does not lose any money). If the interest rates on other similar bonds are now being issued at 7 %, there would be no reason to buy a bond that only makes 5 %, so the seller must sell the bond at a discount (and lose money) which roughly means the buyer who buys it earns 7 % if he holds it until it matures. The possibility of a loss due to a scenario like this is called interest rate risk.