The capital gains from the sale of the house is taxed regardless of what you do with the money next. However, if this was your main house that you owned and lived in for at least 2 years before the sale, you may be able to exclude up to $250,000 of the gain from any tax (or $500,000 if married filing jointly.)
Review publication 523.
https://www.irs.gov/forms-pubs/about-publication-523
Your gain is the difference between the selling price and the purchase price (after certain adjustments as allowed in publication 523), which may have very little to do with the amount of actual cash you took out of the deal.
You pay tax on the gain from selling a house. The tax is the same no matter what you do with the money that you got for the house. Where you put the money has absolutely no effect on the tax that you pay.
If the house that you sold was your main home, you might qualify to exclude part or all of the gain from being taxed.
You will pay the taxes on the taxable portion of the sale AND on the interest earned by the CD.
Are you referring to a "Certificate of Deposit" (such as at a bank)? Or are you saying you sold the house via a "Contract for Deed" where you are essentially holding the mortgage and the buyer is paying you monthly installments (for tax purposes, it is called an "Installment Sale")?