Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
Certificate Of Deposit
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.