answersLogoWhite

0

A certificate of deposit (CD) pays a specified rate of interest over a specified period of time and your return is quantifiable from day one. The return on stocks and bonds will vary over time depending on market and economic factors and interest rate changes thus making it impossible to predict exact future returns. The benefit of a CD is that they are usually insured by the Federal Deposit Insurance Corporation and there is no risk of loss. The drawback of a CD is that your return is capped. Stocks and bonds, although subject to market risk, typically deliver returns in excess of a CD.

User Avatar

Wiki User

10y ago

What else can I help you with?

Continue Learning about Finance

What is the difference between a time deposit and a certificate of deposit?

A time deposit (also known as a term deposit, particularly in Canada, Australia and New Zealand; a bond in the United Kingdom) is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn or it can be held for another term. Generally speaking, the longer the term the better the yield on the money. A certificate of deposit is a time-deposit product. A Certificate of Deposit (CD) can be traded, while a time deposit cant be traded because it is linked to a bank account.


What is an insurance bond certificate?

What is an insurance bond certificate?


How can I cash in my birth certificate bond?

You cannot cash in your birth certificate bond. Birth certificate bonds do not exist, and there is no legitimate way to cash in a birth certificate for money.


What are the key differences between a bond and a stock, specifically in terms of their characteristics and how they function within the financial markets?

Bonds are debt securities issued by companies or governments, while stocks represent ownership in a company. Bonds pay fixed interest and have a maturity date, while stocks offer ownership in a company and potential dividends. Bonds are considered less risky than stocks but offer lower returns. In the financial markets, bonds are traded in the bond market, while stocks are traded in the stock market.


What is a certificate of indebtedness by a corporation to the holder?

bond

Related Questions

What is the difference between a time deposit and a certificate of deposit?

A time deposit (also known as a term deposit, particularly in Canada, Australia and New Zealand; a bond in the United Kingdom) is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn or it can be held for another term. Generally speaking, the longer the term the better the yield on the money. A certificate of deposit is a time-deposit product. A Certificate of Deposit (CD) can be traded, while a time deposit cant be traded because it is linked to a bank account.


What act is most similar to buying a bond?

Investing in a certificate of deposit (CD) is most similar to buying a bond. Both allow you to invest a specific amount of money for a fixed period of time in return for receiving interest payments. Additionally, both bonds and CDs are considered relatively safe investment options compared to stocks.


What is an insurance bond certificate?

What is an insurance bond certificate?


Is it safe to deposit Multiple Bond Recurring Deposit in Sahara Housing Bond?

sahara housing bond is a froud scheme


Where can someone find more information about a time deposit?

In the banking world, the term Time Deposit refers to a savings account or certificate of deposit that pays a fixed interest rate for a given period of time. In the United States, a time deposit is commonly referred to as a certificate of deposit, as a term deposit in Canada, Australia and New Zealand, a bond in England and a fixed deposit in India. One can find terms and interest rates at their local bank, or on internet comparison sites such as Bank Rate or Rate Brain.


What are the basic state laws in order to have insurance for a motorbike?

There is always a mandatory insurance. There is an auto insurance policy, there is self insurance, there is a certificate of deposit, and there is a liability bond.


How can I cash in my birth certificate bond?

You cannot cash in your birth certificate bond. Birth certificate bonds do not exist, and there is no legitimate way to cash in a birth certificate for money.


What are the key differences between a bond and a stock, specifically in terms of their characteristics and how they function within the financial markets?

Bonds are debt securities issued by companies or governments, while stocks represent ownership in a company. Bonds pay fixed interest and have a maturity date, while stocks offer ownership in a company and potential dividends. Bonds are considered less risky than stocks but offer lower returns. In the financial markets, bonds are traded in the bond market, while stocks are traded in the stock market.


What is a negotiated certificate of deposit called in the UK?

I was just poking around trying to answer this question myself, and I'm not sure but it looks like "high interest deposit bond" might be the UK equivalent of what would be called "CD" or "certificate of deposit" in the US. I found that HSBC offers these, according to the following information from their Web site: "If you have £2,000 or more to lock away, we offer a choice of fixed terms from 6 months to three years, and you'll benefit from a fixed interest rate."


What is a certificate of indebtedness by a corporation to the holder?

bond


What is a certificate of indebtedness by a corporation to a holder?

bond


What is a certificate of debt issued by corporations and governments?

Bond