A Certificate of Deposit (CD) is a financial product commonly sold by commercial banks for a specified period of time at a specified rate of interest. A CD is to be held until maturity by banks, at which time they can be withdrawn and interest paid, but offers much higher interest rates than those associated with regular savings accounts. The deposit gains value over an agreed-upon duration, but it could be subject to fees if withdrawn before the end of that time.
Reference Definition by Investopedia.com: A Certificate of Deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements. A CD restricts access to the funds until the maturity date of the investment. CDs are generally issued by commercial banks and are insured by the FDIC up to $250,000 per individual.
Related Definitions in the Project: The Commercial Definitions
