certificate of deposit
- noun a document from a bank showing that money has been deposited at a certain guaranteed interest rate for a certain period of time. A CD is a bearer instrument, which can be sold by the bearer. It can be sold at a discount to the value, so that the yield on CDs varies. CDs are traded on the secondary market by discount houses and CD futures are traded on LIFFE.
- (written as Certificate Of Deposit)A certificate issued by a bank for a deposit having a specified value, interest rate, and date of maturity. A certificate of deposit yields higher interest rates than a standard account, but withdrawals prior to maturity may result in a penalty. Certificates of deposit are guaranteed by the financial institution, and are considered an extremely low-risk investment option.