Question

Write a short note on the Certificate of Deposit.

Answer 1

Certificate of Deposit:

• The money market instruments issued only by the commercial banks and financial institutions under the guidelines of RBI.
• These are the unsecured, negotiable, short-term instruments in bearer form, issued by commercial banks and development financial institutions.
• Their maturity term is between 7 days to a year when issued by banks and if it is issued by the other financial institutes, the maturity period is one to three years.