Certificate of deposit (CD) is a short term deposit instrument issued by banks and financial institutions to raise large sums of money. CDs can be issued with maturity periods between 7 days to 12 months by banks, and 1 to 3 years by financial institutions. They must be a minimum of Rs. 1 lakh and can be freely transferred between parties through endorsement and delivery. CDs offer depositors higher returns on their short term surpluses and banks a way to raise resources and improve lending capacity.

1. CERTIFICATE OF DEPOSIT
NAME-BISWAJEET SAMAL
C.V.RAMAN BUSINESS SCHOOL,BHUBANESWAR

2. Certificate of deposit s are short term deposit instrument
issued by Banks and Financial institutions to raise large
sums of money.
This scheme was introduced in July 1989, to enable
the banking system to mobilise bulk deposits from
the market, which they can have at competitive rates
of interest
The CDs are transferable from one party to another
party to another

3. Who can issue :-Scheduled commercial banks
(except RRBs) and All India Financial Institutions
Maturity Min: 7 days Max : 12 Months (in case of
FIs minimum 1 year and maximum 3 years).
Amount Min: Rs.1 lac, beyond which in multiple of
Rs.1 lac

4. Who can subscribe CDs ?

5. Features of Certificate of Deposit
1.Document of title to time deposit.
2.Unsecured negotiable pronotes.
3.Freely transferable by endorsement and delivery .
4.Issued at discount to face value.
5.Repayable on fixed date without grace days.
6.Subject to stamp duty like the usance promissory notes

6. RBI Guidelines
 The Certificate of Deposits may be issued at a discount on face
value.
 Banks have to maintain CRR and SLR on the issue price of CDs
 Three financial institutions ,viz ., IDBI,ICIC,IFCI, were permitted to
issue CDs with a maturity period of more than one year up to
three years .
 CDs in physical form are freely transferable by endorsement and
delivery. CDs in demat form can be transferred as per the
procedure applicable to other demat securities. There is no lock-in
period for the CDs.

7. In case of Certificate of Deposits, there is no lock in period.
Banks and financial institutions can not grant loans against
Certificate of Deposits and they can’t even buyback their own
Certificate of Deposits before maturity.
CDs in physical form are freely transferable by endorsement
and delivery. CDs in demat form can be transferred as per the
procedure applicable to other demat securities. There is no
lock-in period for the CDs.
Minimum amount of a CD should be Rs.1 lakh, i.e., the
minimum deposit that could be accepted from a single
subscriber should not be less than Rs.1 lakh, and in multiples of
Rs. 1 lakh thereafter

8. Advantages
 Certificate of deposits are the most convenient
instruments to depositors as they enable their short term
surpluses to earn higher return.
 CDs also offer maximum liquidity as they are transferable
by endorsement and delivery. The holder can resell his
certificate to another.
 From the point of view of issuing bank, it is vehicle to raise
resource in times of need and improve their lending
capacity. The CDs are fixed term deposits which cannot be
withdrawn until the redemption date.
 This is an ideal instrument for the banks with short term
surplus found to invest at attractive