Certificates of deposit

A certificate of deposit (CD) is a time deposit sold by banks, thrift institutions, and credit unions in the United States. CDs typically differ from savings accounts because the CD has a specific, fixed term before money can be withdrawn without penalty. CDs also generally have higher interest rates than savings accounts. CDs require a minimum deposit and may offer higher rates for larger deposits. The issuer expects the CDs to be held until maturity, at which time the funds can be withdrawn and interest paid. In the United States, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. In accordance with the Truth in Savings Act, as implemented by the NCUA, credit unions must refer to these accounts as share certificates, certificate accounts, or certificates. The consumer who opens a CD may receive a paper certificate, but it is now common for a CD to consist simply of a book entry and an item shown in the consumer's periodic bank statements. Consumers who want a hard copy that verifies their CD purchase may request a paper statement from the bank, or print out their own from the financial institution's online banking service.