Talk:Certificate of deposit

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History[edit]

There's no mention of the history of the CD. When did they emerge, and why? —Preceding unsigned comment added by 76.226.15.55 (talk) 01:20, 14 May 2009 (UTC)

Criticism[edit]

Is it or isn't it? This section says, "CD [Certificate of Deposite] interest rates closely track inflation." but then says that comment isn't necessarily true. If it isn't true, why is it stated as a fact above? 165.206.43.5 (talk) —Preceding undated comment was added at 14:14, 28 October 2008 (UTC).

It's kind of a simpleminded viewpoint. 'inflation' doesn't apply to everything equally. Depends on what you do with the money.24.4.132.165 (talk) 04:59, 18 September 2010 (UTC)


Re: CD Laddering: "So it seems to be not an effective strategy." Huh ? It's comparable to buy and hold with stocks, but with no risk. http://globaleconomicanalysis.blogspot.com/2009/06/long-term-buy-and-hold-is-still-bad.html

Bankcd.com[edit]

The "bankcd.con" site actually charges $7.95 to provide information on bank interest rates. The same information is available free at bankrate.com. Page edited to reflect this.

  • Restored BankCD link. Although site charges to disclose which banks, rates are free to see. And I have checked and rates seem to be better than Bankrate's. It seems to me that BankCD does a better job in checking best rates. I think the users should decide by themselves which to chose.--AAAAA 02:09, 5 May 2005 (UTC)
    • I just checked and BankCD is now totally free.--AAAAA 18:49, 19 April 2006 (UTC)

Callable[edit]

Does anyone have information on Callable CDs that they could add to this article?--Adam (talk) 19:44, 10 February 2006 (UTC)

Removing Links[edit]

BankRate.com has become the industry standard for free rate information, but they do not exist out of the goodness of their hearts. However, since they have climbed to the top of the industry their link might as well stay. All of the other sites are basically affliate based sites trying to cash in on advertisng or PPC. We have a site that has plenty of useful information and no ads. But we charge for our placement services. I will not post our link because it would be considered spam. I feel the same about the other sites that had links--Cdduncan 17:44, 18 April 2006 (UTC)

  • I feel that all the links are useful. Bankrate also has a lot of advertising and it requires a lot of clicks to see all the rates. I did some checking and I found, for example, that bankcd.com updates their rates daily and bankrate only weekly, and bankcd.com, although not as popular, has better rates. Furthermore, BankRate requires one screen per term, so they show you more advertising. Bankcd.com shows all the rates in one screen.--AAAAA 18:46, 19 April 2006 (UTC)
    • I was encouraged to post this for review. I would like to see all external links to "advertiser" pages be removed. Pleas read on and provide some feed back. I will be honest in that my first reason for coming here was a suggestion from some SEO person that at times you can get a link to your website if done correctly. When it comes to commercial sites you want to be ranked as high as you can, and relevant one-way links fit the bill. I spend a lot of time doing that on my own. I don't like link farms, etc. So when other sites are given free links it is frustrating. BankRate.com doesn't need anymore links. BankCD.com use to charge a fee, but I guess decided they could make more money by having people click ads on their site. And BestCashCow.com, although they give good info, doesn't exist for altruistic reasons. And I believe all 3 fall under #5 of the list of things to avoid when it comes to external links. So, I would like to see their links go away. And just so you know another user felt the same way I did, but I don't recall their exact user name, it was spam something. The history of their changes to the page have been removed. And another ad laden site has a link there now as well. So how many are needed? I vote to have them all removed. BTW, I did add some useful content to the article. $ isn't everything afterall. If those links are going to remain, I don't see why a link to a service company shouldn't be there, as well. Of course then every service company will want a link and your links section just looks useless. So my vote is to remove all "advertiser" links except for bankrate.com, because they are everywhere anyway. --Cdduncan 21:28, 2 May 2006 (UTC)
      • There are about 10,000 FDIC-insured institutions and no single service monitors all of them. Therefore, it makes sense to have several links.--AAAAA 21:15, 10 May 2006 (UTC)

Old Terms and conditions section[edit]

I've removed the Terms and conditions section because it is a how to. See WP:NOT. There is potential here for it to be part of an article. But no where near in its current form... —Cliffb 16:28, 17 October 2007 (UTC)

Terms and conditions[edit]

It is vital that a consumer study the terms and conditions for a CD before purchase.

Employees of the institution are generally not familiar with this information.

In the US, the Federally required "Truth in Savings" booklet, or other disclosure document that gives the terms of the CD, must be made available before the purchase. The standard practice, however, is to provide the booklet to the consumer only after they have purchased a Certificate of Deposit.

  • If purchasing at a branch office, the consumer should obtain the disclosure document and check the CD terms before buying a CD.
  • If purchasing online or by telephone, the consumer should have the disclosure document faxed or mailed and check the CD terms before buying. In those cases where the terms are posted online, the consumer should print a copy.

While the booklet is at first overwhelming due to the length and tiny type, the portion covering the terms specific to CDs is typically less than one page.

Consumers should not rely on verbal explanations from bank employees; only the documents carry any legal weight.

  • Various "certificates" may be offered by companies that are not licensed and regulated financial institutions. CDs can also be forged. See external links in this article.
  • In the US, the institution may not be federally insured by the FDIC or NCUA, which perform periodic audits. A few credit unions obtain insurance from private companies, which could fail in a financial crisis. Check that the institution is currently insured at the FDIC or NCUA website.

Check the terms of the CD:

  • The penalty for early withdrawal—instead of being measured in months of interest—may be calculated to be equal to the institution's current cost of replacing the money.
  • The penalty for early withdrawal may reduce the principal—for example, if principal is withdrawn three months after opening a CD with a six-month penalty.
  • Withdrawals of principal may be at the discretion of the financial institution.
  • The institution may specify that the CD may be "called"—i.e. closed out by the bank or credit union—at any time. Not good on a CD with a high rate.
  • The institution may not commit to sending a notice before automatic rollover at CD maturity.
  • The institution may not allow the customary five- or seven-day grace period before automatically rolling over the CD to a new CD at maturity.
  • Withdrawal of principal below a certain minimum—or any withdrawal of principal at all—may require closure of the entire CD.
  • Any withdrawal of the interest may be limited to the most recent interest payment rather than the accumulated total interest since the CD was opened.
  • A fee may be charged for withdrawals or closure.
  • The CD may start earning interest from the date of deposit or at the start of the next month or quarter.
  • Accumulated interest at the time of withdrawal may be calculated only through the last full month or last full quarter.
  • Institutions generally have the right to delay withdrawals by up to 60 days.
  • If the CD is in a US Individual Retirement Account, a tax penalty is generally charged for withdrawals or closure before the holder reaches a certain age. There are several major exceptions which are explained on the IRS website.

In the US, if any of these conditions apply, they must be disclosed in the Truth in Savings booklet.

The consumer should file the document covering the terms and conditions under which the CD was purchased.

If the CD is closed early or there is some other issue, the consumer will need to refer to the document to ensure that the employee processing the withdrawal is following the original terms of the contract.

The institution's terms may have changed or the institution may have merged—in either case the original institution's terms still apply. Employees of the institution are generally not familiar with CD terms and the institution's computer system may apply different terms than those on the original contract.

Other Similar Products[edit]

Some mention needs to be made in the Other Similar Products of Negotiable vs Non-Negotiable CD's and Electronic CD's.

Also this page to too US based. In Australia for instance there is no insurance on CD's, and they are generally used as a money market alternative to Bank Bills and Commercial Paper (although I think they rank above both in the event the issuing institution becomes insolvent. —Preceding unsigned comment added by 121.223.233.17 (talk) 11:08, 7 July 2008 (UTC)

Free Advertising![edit]

free ads for Wells Fargo and bank CD dot com. It is clear that this article was written in large part by some 2 bit financial advisor that works for a specific company (one of the above 2 more than likely) Many parts of the article read like financial advice, and are not encyclopedic. (i.e. "Be careful") 72.221.123.245 (talk) 03:31, 14 December 2008 (UTC) 03:30, 14 December 2008 (UTC)

Are CDs specific to the United States?[edit]

The article states that CDs are US specific. I am reading Economics (E6) by McTaggart, Findlay and Parkin, and it shows a representation of money on page 507 where CDs account for $189 billion of all money in Australia. Have not made an edit yet. — Preceding unsigned comment added by 122.107.236.88 (talk) 00:38, 26 September 2011 (UTC)

I'm having the same question. CDs are used also in Scandinavia. Bjornte (talk) 12:03, 7 January 2015 (UTC)

CD's : A competition[edit]

I've removed the following section and brought it here:

CD's were introduced by Banks as their one of the major motives was to face competition and to sustain with the number of shares of the financial market and also because CD's showed some advantage over the time deposits. In short, for the financial intermediaries and for the secutrity purposes, the CDs came into existence.[1]
The major attraction for CD's in UK was that the Depositers could be easily influenced to put their savings into the banks for a longer term deposit if it was covered by a negotiable market, whereas, in case of Term Deposits,if a depositer wants to withdraw its money before maturity date, there are several number of penalties levied on him.[2]
In US, around 1960s,it was being accurately noticed by the Commercial Banks that Demand of funds from was the Banks was not coming into equation with the Supply side of the funds which was being pumped in by the Depositing customers and hence,Large banks were getting into pressure due to the losses from the Demand side being faced by them.Seeing such losses, the depositers started to move out their funds and transferred it to Treasury Bills, Commercial Paper and other such money market instruments.At the end, it was found that the aggregrate growth rate of the Non- banking financial institutions was ahead to the aggregate growth rate of the Banking financial institutions.Therefore,In 1961,banks came up with the Negotiable Certificates of Deposits(NCD's)and,hence, the banks were able to get restored the supply side of the corporate funds back into the scenario.[3]
CD's are the reflecting changes int he management of the Liquid cash and thus have enabled the banks to
  1. Avoid the storage of liquid money for long period of time
  2. meet the Loan-demand of the borrowers by raising substantial amount of funds[4]
  3. make long term deposits instead of the short term one

It is certainly a good faith addition and is worth including, but unfortunately it needs copyediting, I don't have access to the sources, though, and don't know the topic well enough to make a shot at it without them, so I'm hoping someone here is in a position to take care of it and add it back. - Bilby (talk) 20:45, 31 October 2011 (UTC)

References

  1. ^ Ritter, Silber, L S, W L (1977). Principles of Money, Banking and Financial Markets. New York: Basic Books. pp. 106–07.
  2. ^ "Certificate of Deposit".
  3. ^ Revell, Jack (1973). The British Financial System. Macmillan, London. p. 277.
  4. ^ Wrightsmen, D (1980). Financial Markets. New York: McGraw Hill International Book Co. p. 225.

CD Refinance Section[edit]

First the title of that section should probably be modified, but that will be for another day. I am adding a couple of references that have occurred recently where banks and credit unions have been modifying their early withdrawal penalties retroactively and even the CD term itself. A big part of the problem is many banks have begun to use Bankers System software and often the disclosures are way too vague. If a disclosure becomes part of a dispute and the bank won't resolve it on their own, it takes a lawsuit. I will have some info posted later to back this up. But basically, the FDIC only insures deposits, they don't work to resolve disclosure issues which then becomes a contract dispute.Chriscd2 (talk) 19:57, 18 November 2011 (UTC)

Cleanup[edit]

Copyright problem removed[edit]

Prior content in this article duplicated one or more previously published sources. The material was copied from: http://www.quickanddirtytips.com/money-finance/investing/what-is-a-cd-and-what%E2%80%99s-the-best-way-to-invest-with-them. Copied or closely paraphrased material has been rewritten or removed and must not be restored, unless it is duly released under a compatible license. (For more information, please see "using copyrighted works from others" if you are not the copyright holder of this material, or "donating copyrighted materials" if you are.) For legal reasons, we cannot accept copyrighted text or images borrowed from other web sites or published material; such additions will be deleted. Contributors may use copyrighted publications as a source of information, and according to fair use may copy sentences and phrases, provided they are included in quotation marks and referenced properly. The material may also be rewritten, but only if it does not infringe on the copyright of the original or plagiarize from that source. Therefore such paraphrased portions must provide their source. Please see our guideline on non-free text for how to properly implement limited quotations of copyrighted text. Wikipedia takes copyright violations very seriously, and persistent violators will be blocked from editing. While we appreciate contributions, we must require all contributors to understand and comply with these policies. Thank you. bd_ (talk) 05:43, 20 September 2014 (UTC)

Comment[edit]

I'm a finance markets professional. This article contains several errors, does not adequately cover the historical development of CDs, and appears to have been written by someone with no understanding of how the market for CDs works. This article should be re-written. Thank you. — Preceding unsigned comment added by 212.38.75.55 (talk) 08:16, 26 June 2015 (UTC)

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Penalty[edit]

The article says that for a five-year CD, the early withdrawal penalty "is often the loss of up to twelve months' interest". Does that mean that it might be six months interest, or nine, or maybe even twelve (independent of when the withdrawal is made)? Or does it mean that you lose the interest up to the time of the withdrawal, but not more than twelve months worth? Can someone clarify this? Maybe Dpbsmith? Eric Kvaalen (talk) 05:45, 20 April 2018 (UTC)


Lakh?[edit]

CDs are issued in denomination of 1 lakh.

"1 lakh" seems oddly India-specific. Is this even true?

Sharpie951 (talk) 12:46, 6 March 2019 (UTC)

"Nicknames"?[edit]

"But longer notes are locked in their rate. This gave rise to amusing nicknames for CDs."

No mention of or reference to what these "amusing nicknames" were? Then why mention them? — Preceding unsigned comment added by Beetfarm Louie (talkcontribs) 22:48, 18 June 2019 (UTC)