certificate of deposit

Thân thiện

A customer holds a certificate of deposit from the bank.

Definition

Noun: A certificate of deposit is a type of savings product offered by banks and credit unions. It is a formal agreement where you deposit a specific sum of money for a fixed period of time. In return, the financial institution pays you interest. Typically, you cannot withdraw the money before the maturity date without paying a penalty.

Usage

A certificate of deposit is used as a low-risk investment or savings tool. It is often chosen by people who have a lump sum of money they do not need to access immediately and want to earn a higher interest rate than a regular savings account. - She put her savings into a certificate of deposit with a 12-month term. - The bank offered a competitive interest rate on its 5-year certificate of deposit.

Advanced Usage

• "to roll over a certificate of deposit": This means to reinvest the money from a maturing CD into a new one.
  • When my certificate of deposit matured, I decided to roll it over into a new one with a longer term.

Variants and Related Words

• CD (Noun): This is the common abbreviation for certificate of deposit.
  • I'm comparing the APY on different CDs from local banks.
• Time deposit (Noun): A more general financial term that includes certificates of deposit.
  • A certificate of deposit is one common form of a time deposit.

Synonyms

• Savings certificate: Another name for a certificate of deposit.
• Fixed-term deposit: Emphasizes the locked-in period of the agreement.

Related Phrases

• CD ladder (Noun Phrase): An investment strategy involving multiple certificates of deposit with different maturity dates.
  • He uses a CD ladder to manage liquidity and interest rate risk.

Học thuật

Noun

1. a debt instrument issued by a bank; usually pays interest

Từ đồng nghĩa

• cd