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What is a Certificate of Deposit (CD)? Comments

  • By Jocelyn Black Hodes, DailyWorth's Resident Financial Advisor
  • June 21, 2013

A Certificate of Deposit (CD) is a promissary note generally issued by commercial banks that has a maturity date, fixed interest rate and is insured by the FDIC. In most cases there is a penalty for withdrawing your investment prior to the maturity date. CDs are a common savings strategy, because they are considered to be "safe" investments; however, their interest rates are typically lower than municipal and corporate bonds.  

 

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