Certificate of Deposit
A certificate of deposit (CD) is a period store, a financial market product regularly sold in the United States and some other countries by banks, thrift organizations, and credit unions.
CDs are like savings accounts because they are risk-free and insured. are like investment accounts in that they are guaranteed “cash in the bank” and subsequently basically chance free. Federal Deposit Insurance Corporation (FDIC) insure CDs in the USA, for banks and by the National Credit Union Administration (NCUA). They vary from investment accounts in that the CD has a particular, fixed term (sometimes one, three, six months or a half year up to five years) and, more often than not, an agreed interest rate. The bank expects that the client hold the CD until maturity, at which time the client can withdraw the cash and fixed interest earned.
CDs regularly require a minimum deposit to begin with, and may offer higher fixed-interest rates for larger cash deposits. The best rates are for the most part offered on “Jumbo CDs” with minimum deposit of $100,000 or more.