ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A Certificate of Deposit (CD) is a money market instrument which is issued in a dematerialised form against funds deposited in a bank for a specific period.

Detailed explanation-2: -Money markets include markets for such instruments as bank accounts, including term certificates of deposit; interbank loans (loans between banks); money market mutual funds; commercial paper; Treasury bills; and securities lending and repurchase agreements (repos).

Detailed explanation-3: -Certificate of Deposit (CD) is a negotiable money market instrument and issued in dematerialised form or as a Usance Promissory Note against funds deposited at a bank or other eligible financial institution for a specified time period.

Detailed explanation-4: -Fixed deposits are even referred to as CDs or time deposits by certain banks. They come with the same term period, a minimum requirement for a deposit, and high-interest rates compared to traditional savings accounts. One difference is that CDs are freely negotiable while FDs are not.