Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• CERTIFICATE OF DEPOSIT (CD)
  
  CDs are time deposits offered by banks and insured by the Federal Deposit Insurance Corporation (FDIC). You generally earn compound interest at a fixed rate, which is determined by the current interest rate and the CD's term, which can range from a week to several years. However, rates can vary significantly from bank to bank, and some banks also offer or offer adjustable rate CDs or hybrid CDs whose earnings are tied to a stock index such as the Standard & Poor's 500-stock Index (S&P 500). You usually have to pay a penalty if you withdraw funds before your CD matures, often equal to the interest that has accrued up to the time you make the withdrawal.
  
  Back