Dividend rates are established by the Board of Directors and are subject to change, based on current economic conditions and company annual earnings.
(APY) Annual Percentage Yield assumes reinvestment of principal and dividends. APY is calculated by compounding interest, this is interest which is added to the original principal. New interest is then calculated, not only on the principal, but also on the interest that has been added. The more frequently interest is compounded, the faster the principal grows. Yearly compounded interest is considered the norm unless it is specified to be otherwise.
A CD in the world of personal finance is not a compact disc but a certificate of deposit. You buy a CD from a bank or savings & loan for some amount of money, and the bank promises to pay you a fixed interest rate on that money for a fixed term. For example, you might buy a 30-month CD paying 3% in the amount of $5,000. A bank may have a minimum amount for issuing CDs like $1,000, but there is usually no requirement to buy a CD with an even amount. Interest earned by a CD may be paid monthly, quarterly, annually, or when the CD matures. Interest paid during the CD's term is paid by check or deposited to another account; it is never added to the amount of the CD (like in a savings account), because the CD amount is fixed.
After you have purchased a CD, you can always redeem it before the stated maturity date. However, if you cash out early, the bank will impose a penalty in the amount of 3 or 6-months of interest payments, depending on the term. This "penalty for early withdrawal" is due whether any interest was paid or not.
As the name implies, a CD is usually a piece of paper (the certificate) that states the interest rate and term (actually the maturity date). Because CDs are issued by banks, a CD for less than $100,000 is insured by the government (probably the FDIC program), so the investment is essentially risk-free.
Some CDs can be bought and sold much like a stock or bond. If you buy a CD through a brokerage house, you may be able to re-sell the CD through them to avoid paying an early withdrawal penalty. These CDs usually have significant minimum investment amounts (like $5,000) and require round numbers (like multiples of 1,000).