BANKING AFFAIRS

Detailed explanation-1: -Liquidity status of certificate of deposit which is more negotiable is considered as more liquid. Liquid certificates of deposit are a type of certificate of deposit (CD) that allow investors to make withdrawals without incurring a penalty.

Detailed explanation-2: -Liquid or ‘No penalty’ Certificate of Deposit Liquid CDs enable the depositor to take money out before maturity without any early withdrawal fees. It is adaptable enough to move money from one CD to another that pays more. As compared to a fixed-term standard CD, it offers a lower certificate of deposit rate.

Detailed explanation-3: -Liquid assets are assets that are easily and simply converted to cash. Examples of liquid assets include cash, bonds, and CDs. Assets that lack liquidity require time or effort to trade or sell, like real estate or collectibles.

Detailed explanation-4: -Negotiable certificates of deposit are CDs with a minimum face value of $100, 000. They are guaranteed by banks, cannot be redeemed before their maturation date, and can usually be sold in highly liquid secondary markets. Along with U.S. Treasury bills, they are considered a low-risk, low-interest security.

Detailed explanation-5: -Since negotiable CDs require large amounts of cash, they’re usually only purchased by institutions and wealthy individuals. For example, if you had $100, 000 in your savings account you could use it to open a negotiable CD and earn an interest rate for a specific period of time, such as six months.