ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest.

Detailed explanation-2: -: an official document in which a bank promises to pay a specified amount of interest when you deposit money in the bank for a specified period of time.

Detailed explanation-3: -It is like a savings account. For example, Joe invested $5, 000 in CD with a bank at a fixed interest rate of 5% with 5 years maturity. Upon maturity, Joe’s initial investment of $5000 had reached $6, 382. The return on CD for the period of 5 years was $1, 382.

Detailed explanation-4: -A certificate of deposit (CD) is a low-risk savings tool that can boost the amount you earn in interest while keeping your money invested in a relatively safe way. Like savings accounts, CDs are considered low risk because they are FDIC-insured up to $250, 000.