Certificates of Deposit

Often abbreviated to CD.
Also known as Negotiable Certificate of Deposit (NCD).

An insured certificate of deposit represnts a loan from an investor to a bank or a saving & loan (S&L). The loan is usually for a fixed time
A negotiated certificate is for very large amounts $5 million plus. These are only issued by the large banks.
These are receipts issued by the banks when soliciting wholesale deposits.
The lenders may be other banks or corporates or investment institutions.
The advantage to the borrower is that the money is lent for a specific period of time, for example 3 months.
The advantage to the lender is that, if they need the money back earlier, the certificate can be sold to someone else quite easily.

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