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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  1. Are certificates of deposit a kind of bond?

    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 >>
  3. Other than my savings account, what other types of holdings compound my interest?

    Investors and savers can use the power of compounding interest to accumulate wealth over time. Unlike simple interest that ... Read Full Answer >>
  4. How often is interest compounded?

    Interest can be compounded on any given frequency schedule. Common interest compounding time frames are daily, monthly, semi-annually ... Read Full Answer >>
  5. What is a risk pyramid and why is it important?

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    For the majority of younger investors, taking on risk within a portfolio in return for higher returns is the norm. Because ... Read Full Answer >>

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