Financial Dictionary		Atlantic Financial Investment Word
Certificate of Deposit (CD)

A Certificate of Deposit (CD) is paper issued by banks and insured by FDIC. Banks agree to pay a stated amount of interest on a Certificate of Deposit and FDIC guarantees those interest payments and the principal. A Certificate of Deposit is safe from principal risk, but tends to pay low interest rates.  These rates  have historically not kept pace with the rate of inflation.