What is the difference between a time deposit and a certificate of deposit?

Time deposit: A bank deposit that cannot be withdrawn before a date specified at the time of deposit.





Certificate of deposit: A certificate from a bank stating that the named party has a specified sum on deposit, usually for a given period of time at a fixed rate of interest.





Dictionary time deposit on Answers.com. The American Heritage庐 Dictionary of the English Language, Fourth Edition Copyright 漏 2004 by Houghton Mifflin Company. Published by Houghton Mifflin Company.


Dictionary certificate of deposit on Answers.com. The American Heritage庐 Dictionary of the English Language, Fourth Edition Copyright 漏 2004 by Houghton Mifflin Company. Published by Houghton Mifflin Company.|||As the definition implys, the difference is that you can cash in a CD before the end of the given period of time subject to a (reduction in interest paid) penalty stated in the CD. A time deposit can't be withdrawn early but usually could be used a collateral for a loan until the cash became available.





With a CD you should never get less out than you put in.





With a time deposit where you had to have the cash early and borrowed against the deposit, you would be very likely to "lose" more than just the interest you would have gotten.|||A time deposit is more for you the customer and a certificate of deposit is used in doing personal business often. You make a time deposit when you want to use your account as collateral for a loan for a certain length of time. The certificate of deposit is different. Usually a CD is at a higher rate of interest, than a pass book savings plan. The greater the amount of time that you are willing to leave it in the CD is where they will arrive at a interest rate.See example;


CD for 12 mos. maybe a 1/4 % more than a pass book account


CD for 24 months maybe 1% more interest than a PB


CD for 60 months maybe 3% more interest but in all cases you must leave the funds in the CD to gain that interest rate.





A time deposit is a instrument to gain a loan


CD is an instrument for saving money