certificate of deposit
- The definition of a certificate of deposit, or CD, is a time deposit that will pay a specified amount of interest if the depositor leaves the money in the account for the term of the account.
When you deposit money and promise to leave it in the bank for six months in order to earn a higher interest rate, the paper you get representing the deposit is an example of a certificate of deposit.
certificate of deposit definition by Webster's New World
- a time deposit paying a specified rate of interest for a specified period of time, with a penalty imposed for premature withdrawal of the deposited funds
- a certificate acknowledging such a deposit
certificate of deposit definition by American Heritage Dictionary
certificate of deposit - Investment & Finance Definition
A deposit with a specific maturity date and a specific interest rate. Many individual investors buy CDs from a bank, although corporations also purchase commercial CDs that are extremely large. CDs also are sold by savings and loans and credit unions. CDs sold by banks or S&Ls that are Insured by the Federal Deposit Insurance Corp. are insured up to $100,000. Interest earned on CDs are taxable by federal and state governments. If the CDs mature in 1 year or less, they can be used as a cash reserve.Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana. Used by arrangement with John Wiley & Sons, Inc.
certificate of deposit - Legal Definition
- A certificate from a bank acknowledging the receipt of money and a promise to repay it at a specified time and with interest determined at a specified rate.
- A bank document evidencing a time deposit. Abbreviated C.D.