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certificate of deposit Definition

certificate of deposit

noun

  1. 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
  2. a certificate acknowledging such a deposit

certificate of deposit (CD) 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.

certificate of deposit Law Definition

n

  1. 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.
  2. A bank document evidencing a time deposit. Abbreviated C.D.