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CD |
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CD (1) CD (2) The two-character ISO 3166 country code for CONGO, THE DEMOCRATIC REPUBLIC OF. Certificate of Deposit A deposit at a bank or other financial institution that has a fixed return (usually via an interest rate) and a set maturity. The depositor does not have access to the funds in a certificate of deposit until maturity; in exchange, he/she is usually entitled to a higher interest rate. CDs are insured by the FDIC up to a certain amount and as such are a way to increase return for no extra risk. See also: Demand deposit, Real estate certificate of deposit, Negotiable certificate of deposit.
Certificate of deposit (CD). CDs are time deposits. When you purchase a CD from a bank, up to $100,000 is insured by the Federal Deposit Insurance Corporation (FDIC). You generally earn compound interest at a fixed rate, which is determined by the current interest rate and the CD's term, which can range from a week to five years. However, rates can vary significantly from bank to bank. You usually face a penalty if you withdraw funds before your CD matures, often equal to the interest that has accrued up to the time you make the withdrawal. CD See certificate of deposit.Certificate of Deposit (CD) What Does Certificate of Deposit (CD) Mean? A savings instrument that guarantees to pay to the purchaser interest and principal. A CD has a maturity date (one month to five years) and a specified fixed interest rate and is issued in several denominations. CDs generally are issued by commercial banks and are insured by the FDIC. Investopedia explains Certificate of Deposit (CD) A CD is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. If one purchases a $10,000 CD with an interest rate of 5% compounded annually and a term of one year, at the year's end, the CD will have grown to $10,500 ($10,000 × 1.05). Although the holder can withdraw money before maturity, this action may result in a financial penalty. CDs of less than $100,000 are called small CDs; CDs of more than $100,000 are called large CDs or jumbo CDs. Almost all large CDs, as well as some small CDs, are negotiable. Related Terms: Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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