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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Certificate Of Deposit

Definition:

Think of it like an upgrade for your savings account. A certificate of deposit (also called a CD) is an unsecured promissory note (like an IOU) given to you by a bank. You can put money into a CD and your money earns more interest than it would with a simple savings account. There's a catch, though: you pay hefty penalties if you try to get at your money before the maturity date. Maturity dates on CDs can be a month or a few years and these puppies can earn you a floating rate or fixed rate.