Maybe it's because the CD is a fixed amount that you can't withdraw without penalty, so the bank can "bank" on the money being there, in other words, they can guarantee their income.
Yes. That's why CDs are a good deal for the bank. The question is, why would I take them up on this, when I can get a better rate without giving them that advantage? They ought to offer me a better rate than the withdraw-on-demand account has, in order to get the advantage of having the money for a fixed term.
If it's worth saying, but not worth its own post (even in Discussion), then it goes here.