Certificate of Deposit

A negotiable instrument issued by a bank in exchange for funds, usually bearing interest, deposited with the bank.

Usually called a CD, a certificate of deposit is a short - to medium - term instrument (one month to five years) issued by a bank or savings and loan to pay interest at a rate higher than that paid by a regular savings account.

A document issued by a bank or other financial institution that is evidence of a deposit, with the issuer's promise to return the deposit plus earnings at a specified interest rate within a specified time period.