CERTIFICATES OF DEPOSITS

Certificate of deposit. A certificate of deposit (CD) is a promissory note issued by a bank. It is a time deposit that restricts holders from withdrawing funds on demand. Although it is still possible to withdraw the money, this action will often incur a penalty. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination.

CDs are generally issued by commercial banks and are insured by the FDIC (in the US). The term of a CD generally can range from one week to ten years. Retail certificates of deposit are defined as those under $100,000. Large time deposits are defined as deposits larger than $100,000.

Case. Sun Trust retail CDs [see].

Pricing. See Bankrate.com

Tenor / Maturity. 7 days to 10 years.

Balance sheet. Liabilities. Depositary sources of funds (non-depositary sources: bonds, borrowing from other banks, discount borrowing from the central bank).

Type of banking. Retail / corporate.

Size of the market. Retail deposits at US Commercial Banks, March 7 2012: $ 7.088.0 billion. Large time deposits at US Commercial Banks, March 7 2012: $ 1.499.0 billion. Source: US Federal Reserve.

See Adam Satariano: “Apple Seen Paying Some of $97.6 Billion in Cash as Dividend”, Bloomberg. Corporations are active players in the CD market!
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