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certificate of deposit (CD) definition
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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