Uninsured Certificate Of Deposit

DEFINITION of 'Uninsured Certificate Of Deposit'

A certificate of deposit (CD) which is not insured against losses. Due to the lack of insurance, these CDs yield a higher interest rate, as the purchaser assumes all of the risk. In the event that the financial institution that issued the CD goes bankrupt, the purchaser loses the investment.

BREAKING DOWN 'Uninsured Certificate Of Deposit'

Most certificates of deposit are insured twice over. Once, by the Federal Deposit Insurance Corporation (FDIC), and also by the National Credit Union Association (NCUA). These institutions would take care of the investment in the event that the lending financial institution was incapable.

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RELATED FAQS
  1. Can certificates of deposit (CDs) lose value?

    CDs are FDIC insured, so they do not lose face value, though broker-issued CD accounts do carry risks. Read Answer >>
  2. What is considered a good interest rate for a certificate of deposit (CD)?

    Explore the various options available with certificates of deposit and discover how to find the most lucrative rates for ... Read Answer >>
  3. What are the typical durations for a certificate of deposit?

    Investing in a certificate of deposit offers individuals the ability to earn interest on idle funds with less risk than stock ... Read Answer >>
  4. Are certificates of deposits different from money market demand deposits?

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  5. How safe an investment is a certificate of deposit?

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