How does a certificate of deposit work?

Answer by  joantheresa (1421)

You deposit a certain amount of money with a bank at a certain rate of interest for a certain period of time. After that time, you redeem the certificate.

Answer by  coly20032003 (78)

As far as I am concerned, a certificate of deposit is a certificate that the bank gives you when you deposit some money into the bank. It indicates the date you deposited, how much money you deposited. And you could use the cerficate of deposit to withdraw certain money at a specific time.

Answer by  sherryk (621)

Deposit money--make SURE bank's insured by Federal Government (FDIC). DON'T put over $100,000 in any one certificate! You must keep at bank till an agreed upon date; bank pays you interest. The longer it's there, the higher the interest. Investigate money market accounts (stock broker)--usually pays more & can withdraw!