• Abbreviated CD. Also called a time deposit, this is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited. A CD bears a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.
• A time deposit with a specific maturity evidenced by a certificate. Large-denomination CDs are typically negotiable.
• A short-term debt security, which can have a maturity period of anything from a few weeks to several years; interest rates are established by market conditions and competitive environment.
• A CD is a note issued by a bank for a savings deposit that an individual agrees to leave invested in the bank for a certain term. At the end of this term, on the maturity date, the principal may either be paid to the individual or rolled over into another CD. Interest rates on CDs between banks are competitive. Monies deposited into a CD are insured by the bank, thus they are a low-risk investment. Maturities may be as short as a few weeks or as long as several years. Most banks set heavy penalties for premature withdrawal of monies from a CD. Large-denomination CD's are typically negotiable.
• This is a negotiable instrument. Involves fixed maturity, 2 weeks to 8 years. Face values under $100,000. The interest rates are competitive with T-Bill rates. Early withdrawals are subject to significant penalty. Holder must pay state and local taxes (unlike T-Bills). Explicitly covered by the deposit insurance.
Practical Advice for Everyone on How to Save and Manage Money: No matter how old or young you are, there are some basic things you can do to better manage and protect your money. Here are recommendations from FDIC Consumer News. More...
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