Certificates of Deposits (CDs)
A CD is a promissory note from a bank or thrift institution that typically offers a higher rate of interest than a regular savings account because it restricts the depositor from withdrawing funds prior to its time-based maturity date.
A few facts:
- CDs generally have maturity dates ranging from 3 months to as long as 10 years or more, with a minimum deposit of $1,000.
- The types of CDs available through TD Ameritrade are called brokered CDs.
- They are similar to CDs purchased directly from a bank, except they can be traded on the open market.
- Brokered Certificates of Deposits that you choose to sell prior to maturity in a secondary market may result in loss of principal due to fluctuation of interest rates, lack of liquidity, or transaction costs.