certificate of deposit

A written recognition by a bank of a deposit, coupled with a pledge to pay the deposited amount plus interest, if any, to the depositor or to his or her order, or to another individual or to his or her order.

A form of Commercial Paper that serves as documentary evidence that a savings account exists.

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certificate of deposit (CD) n. a document issued by a bank in return for a deposit of money which pays a fixed interest rate for a specified period (from a month to several years). Interest rates on CD's are usually higher than savings accounts because banking institutions require a commitment to leave money in the CD for a fixed period of time. Often there is a financial penalty (fee) for cashing in a CD before the pledged time runs out.

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See also: receipt