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Certificate Of Deposit (CD)

Updated on May 16, 2024 , 24979 views

What is a Certificate Of Deposit?

A certificate of deposit (CD) is a relatively low-risk debt instrument purchased directly through a commercial Bank or savings and loan institution. It is a savings certificate with a fixed maturity date, specified Fixed Interest Rate. It can be issued in any denomination aside from minimum investment requirements. CD restricts holders from withdrawing funds until the maturity date of the investment.


A CD is typically issued electronically and may automatically renew upon the maturity of the original CD. When the CD matures, the entire amount of principal,as well as interest earned, is available for withdrawal.

Salient Features of Certificate of Deposit

Maturity period

The CDs are issued by the bank at a discount to Face Value, at Market-related rates, ranging from three months to an year. When a financial institution issues CD, the minimum term is one year and maximum three years.


It can be issued by the bank to individuals, funds, companies, trust, associations, etc. On the non-repatriable Basis, it can be issued to Non-Resident Indians (NRIs) also. All scheduled commercial bank, not including regional rural bank and cooperative bank, are eligible to issue the certificate of deposit.

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The minimum issue size of a certificate of deposit is INR 5,00,000 to a single investor. Moreover, when the CDs exceeds INR 5,00,000, it should be in multiples of INR 1,00,000.


CDs existing in physical form can be freely transferred by way of endorsement and delivery. In dematerialised form can be transferred, as per the process of other dematerialised securities.

All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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