Uninsured Certificate Of Deposit

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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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  3. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  4. National Credit Union Administration ...

    An agency of the United States federal government that was created ...
  5. Financial Institution - FI

    An establishment that focuses on dealing with financial transactions, ...
  6. Asset Management and Disposition ...

    A type of contract between the Federal Deposit Insurance Corporation ...
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