Certificate of Deposit

A certificate offered by a bank for a deposit that will be left untouched for a specified length of time. In return for not withdrawing the money, the customer will normally earn a yield and enjoy a high degree of safety of his or her money. Withdrawal of the cash in a CD before its maturity date may result in a penalty fee and/or some loss of interest. CDs typically are held from 30 days to 5 years. Credit unions generally call CDs certificates or certificate accounts.