Certificate of Deposit Rates
In U.S. deposit terminology, the term Certificate of Deposit Rates refers to the interest rate paid to holder s of Certificates of Deposit. The interest rate for these money market instruments with a relatively short maturity date is typically a fixed rate of interest, and payable on a specified maturity date.
For example, a $10,000 Certificate of Deposit with a Certificate of Deposit Rate of 0.85% and a one year term would pay the individual, business or financial institution holding it $85.00 in interest plus their principal at the end of the one year period when the Certificate of Deposit matures. Certificate of Deposit Rates vary considerably with different maturities and with the size of the certificate�s principal amount sizes. Certificate of Deposit Rates apply to term deposits of term typically ranging from one month to as much as ten years, and they can vary widely among different banking and retail financial institutions. Longer term Certificate of Deposit Rates are generally higher than shorter term rates, and this is consistent with the currently positive sloping yield curve environment. Some recent U.S. Certificate of Deposit Rates in 2011 ranged from 0.25% on a one month certificate to 3.25% for a ten year certificate.