TeachMeFinance.com - explain certificate of deposit (CD)
certificate of deposit (CD) -- the certificate issued to a depositor who opens a certificate account. The certificate is the written document issued by the financial institution as evidence of a deposit. It includes the issuer's promise to return the deposit at a specified future date plus earnings at a specified rate of interest.
Certificate of deposit -- A certificate of deposit is a receipt
from or acknowledgment by a bank that a certain amount of
money has been entrusted to it as a special deposit. It is
transferable. It may be made payable by a correspondent of
the bank in some other place. A certificate of deposit cannot
be drawn against by check.
A certificate of deposit is called a demand certificate when
it is payable on demand or a time certificate when it is payable
on or after a certain future time. A time certificate usually
bears interest at a specified rate.
A certificate which represents stock deposited for the reorganization
of a company or for some other purpose is also
called a certificate of deposit.
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Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".
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