A Certificate of Deposit (CD) is a short-to-medium term, negotiable money market instrument issued by scheduled commercial banks and select financial institutions in India at a discount to face value or on a fixed interest rate basis, with maturities ranging from 7 days to one year for banks (and 1 to 3 years for financial institutions), representing a fixed-tenure, fixed-return deposit that cannot be withdrawn prematurely (unlike a regular fixed deposit). CDs are issued in dematerialised form and are freely tradeable in the secondary market, providing liquidity to investors who need to exit before maturity. Minimum issue size is ₹5 lakh and in multiples thereof. CD yields closely track money market rates and RBI's liquidity stance, making them sensitive indicators of short-term interest rate conditions. For institutional investors, corporate treasuries, and sophisticated retail investors on Ventura Securities, CDs offer a safe, liquid, and relatively higher-yielding alternative to savings deposits for deploying short-term surplus funds — particularly during periods of tight liquidity when CD yields spike above FD rates.
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