CD

Accounting Dictionary

CD

Certificate of Deposit.

You agree to put a certain amount of money in the bank and keep it there for a certain length of time. In return the bank agrees to pay you a higher interest rate than it pays its other depositors. Mary’s bank pays an interest rate of .05%. If Mary agrees to put the money in the bank for two years and not take it out, the bank agrees to pay Mary 1% interest. Mary has a certificate of deposit.

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