Financial Dictionary
Investment Word
Atlantic Financial
Atlantic Financial
Investment Word
Certificate of Deposit (CD)
A Certificate of Deposit (CD) is paper issued by banks and insured by FDIC.
Banks agree to pay a stated amount of interest on a Certificate of Deposit and
FDIC guarantees those interest payments and the principal. A Certificate of
Deposit is safe from principal risk, but tends to pay low interest rates.
These rates
have historically not kept pace with the rate of inflation.
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