A time DEPOSIT issued by a BANK to a depositor that pays a fixed or variable INTEREST RATE; in most instances the deposit represents a senior, unsecured LIABILITY of the issuing bank. A CD may be issued onshore or offshore in any one of several currencies, with a final maturity ranging from 1 week to 10 years. Certain CDs (i.e., NEGOTIABLE CDs) can be actively traded in the SECONDARY MARKET. See also FLOATING RATE CERTIFICATE OF DEPOSIT, LOCKUP CERTIFICATE OF DEPOSIT.

More On This Topic

Link to This Definition
Did you find this definition of CERTIFICATE OF DEPOSIT (CD) helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary