Features of Certificate of Deposits

What are the Main Features of a Certificate of Deposits?

Victor from  Kenya

Victor! I have already explained certificate of deposits. Features of a certificate of deposits is just more explanation its meaning. Ok, I telling its features for more understanding the concept of a certificate of deposits.

1. Deal in Money Market Only

There are two main market for getting fund for company. One is money market and other is capital market. In capital market, we issue the shares and stocks. People come and buy the same. When they need money they also sell these shares. But in money market, short term money needs are fulfilled. Bank can issue a certificate of deposits and get money from public. It is just like one or two years FD. But in the FD, people request. But in a certificate of deposits, bank has to request through advertising in news or online way.

2. Using of Ladders Facility in CDs

We can use ladders facility in CDs. It is useful from investor point of view. In this ladders facility, investor does not invest his all money in one type of CDs, he invests step by step. First of all he invest in very short period CDs. After this, he collects its money from it and invest in the CDs who have good rate of interest. By taking ladders facility, you can easily reinvest your received interest in previous CDs.

3. Guaranteed Return of Your Invested Money

This is also feature of CDs that your money will be refunded. So, these are very secured investment than any other investment.