CERTIFICATE OF DEPOSIT

CERTIFICATE OF DEPOSIT :
- It is a negotiable claim issued by a bank in return for a Term Deposit.
- CDs are securities which are purchased for less than their face value, which is the bank's promise to repay the deposit and thus offer a yield to maturity (YTM).
- The secondary market in CDs is made up by the Discount Houses and the banks in the Inter-Bank Market. Where a depositor knows that he can, if necessary, sell his CD he will be willing to place his funds with a bank for long periods.