CDS

CDS

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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