certificate of deposit (CD)

certificate of deposit (CD) definition - business

certificate of deposit (CD)

A receipt, issued by a financial institution for a deposit of funds, that permits the holder to receive interest plus the deposit at maturity. Federal law requires a nominal penalty for early withdrawal of CDs, but financial institutions often impose more costly penalties. See also add-on, callable CD, early-withdrawal penalty, jumbo certificate of deposit, negotiable certificate of deposit, term certificate, zero-coupon certificate of deposit.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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