We have changed our privacy policy. In addition, we use cookies on our website for various purposes. By continuing on our website, you consent to our use of cookies. You can learn about our practices by reading our privacy policy.
© 2016 Shmoop University, Inc. All rights reserved.

Finance Glossary

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.