Negotiable Certificate Of Deposit (NCD)

DEFINITION of 'Negotiable Certificate Of Deposit (NCD)'

A certificate of deposit with a minimum face value of $100,000. These are guaranteed by the bank and can usually be sold in a highly liquid secondary market, but they cannot be cashed-in before maturity.

BREAKING DOWN 'Negotiable Certificate Of Deposit (NCD)'

Due to their large denominations, NCDs are bought most often by large institutional investors. Institutions often use these as a way to invest in a low-risk, low-interest security.

A Yankee CD would be one example of a NCD.

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RELATED FAQS
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    There is a fair amount of overlap between certificates of deposit (CDs) and bonds; they are both fixed-income securities, ... Read Full Answer >>
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    Demand deposits and term deposits differ in terms of accessibility or liquidity, and in the amount of interest that can be ... Read Full Answer >>
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