DEFINITION of 'Jumbo CD'

A certificate of deposit (CD) with a minimum denomination of $100,000. Jumbo CDs have higher denominations than regular certificate of deposits, and allow investors to deposit a certain amount of money and receive interest. These investments are considered low-risk, stable investments for large investors. They typically pay interest at a higher rate than lower denomination CDs.

BREAKING DOWN 'Jumbo CD'

Jumbo CDs are typically bought and sold by large institutional investors, such as banks and pension funds, because of the high minimum denomination. Investors are mainly compensated for not having access to their money over the contract period. The longer the time period and the higher the denomination, the higher the interest rate will be.

RELATED TERMS
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
  2. Brokered Certificate Of Deposit

    A certificate of deposit (CD) that is purchased through a brokerage ...
  3. Uninsured Certificate Of Deposit

    A certificate of deposit (CD) which is not insured against losses. ...
  4. Index-Linked Certificate Of Deposit

    A certificate of deposit (CD) with a return based on a specific ...
  5. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  6. Indexed Certificate Of Deposit ...

    A savings certificate entitling the bearer to receive an interest ...
Related Articles
  1. Investing

    Certificate of Deposit (CD)

    A certificate of deposit, or CD, is a common financial product sold by banks, thrift organizations and credit unions. This type of product is often called a time deposit. CDs are insured up to ...
  2. Investing

    Are CDs Good Protection For The Bear Market?

    Certificates of deposit promise stable income in any market, but do they deliver?
  3. Investing

    Should CDs Be a Thing of the Past?

    Certificate of deposit rates remain low. Are there better alternatives?
  4. Investing

    CDs Vs. Inflation: Are They Keeping Up?

    Learn how to determine whether the money invested in certificates of deposit (CDs) can keep pace with the rate of inflation and how you measure inflation.
  5. Managing Wealth

    How To Create A Laddered CD Portfolio

    Laddered certificates of deposit offer safe capital and predictable cash flow, while bringing simplicity to your portfolio.
  6. Investing

    How Time Deposits Work

    A time deposit is an interest-bearing bank deposit that has a specific maturity date.
RELATED FAQS
  1. 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 >>
  2. How safe an investment is a certificate of deposit?

    Discover certificates of deposit, their basic makeup and numerous variations, and understand why they are some of the safest ... 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. How are yields taxed on a certificate of deposit (CD)?

    Learn how interest earned on a certificate of deposit is taxed and how this may reduce the total return of an investment ... Read Answer >>
Hot Definitions
  1. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an ...
  4. Salvage Value

    The estimated value that an asset will realize upon its sale at the end of its useful life. The value is used in accounting ...
  5. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  6. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
Trading Center