large-denomination Certificate of Deposit ($100,000 or more) issued by a commercial bank. Negotiable CDs are issued as interest-bearing time deposits, paying the holder a fixed amount of interest at maturity. These negotiable instruments are typically held by wealthy individuals, insurance companies, and financial institutions. There is an active secondary market for negotiable CDs of the 25 largest U.S. banks. Maturities vary from 14 days to 12 months, with the average maturity being about 3 months. CDs sold in the secondary market generally trade in round lots of $1 million or more, and frequently $5 million. Negotiable CDs also have been issued in discount form, paying the holder the face value at maturity.
above $100,000. These certificates are payable either to the bearer or to the order of the depositor and, being negotiable, enjoy an active secondary market, where they trade in round lots of $5 million.
large-dollar-amount, short-term certificate of deposit. Such certificates are issued by large banks and bought mainly by corporations and institutional investors. They are payable either to the bearer or to the order of the depositor, and, being negotiable, they enjoy an active secondary market, where they trade in round lots of $5 million. Although they can be issued in any denomination from $100,000 up, the typical amount is $1 million. They have a minimum original maturity of 14 days; most original maturities are under six months. Also called a jumbo certificate of deposit.
