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.

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