Which of the following is true about a certificate of deposit?
A)It is a promise to pay.
B)It is used to extend credit to a buyer.
C)It is a three-party instrument.
D)It can be made to pay on demand.

Question

Quizplus · Accepted Answer

A certificate of deposit (CD) is a financial product offered by banks and credit unions, where the customer deposits a specific amount of money for a fixed period of time, and in return, the bank promises to pay a fixed rate of interest. Essentially, it is a promise by the financial institution to pay the customer upon the maturity of the CD.

Which of the Following Is True About a Certificate of Deposit