What is a Jumbo CD?
A jumbo CD is a certificate of deposit in a very large denomination, usually at a minimum of $100,000. Also called negotiable certificates of deposit, these large investments are considered low-risk, stable investments for large investors. A jumbo CD has the same basic characteristics as a traditional certificate of deposit. They are considered “time deposits” because they lock up an investor’s principal for a set time period, typically ranging from three months to six years. In exchange for tying up principal, the investor earns a guaranteed return at a set percentage rate locked in at the time of purchase. This return is payable when the CD matures, or reaches the end of the predetermined time period. Like a traditional CD, a jumbo CD is considered a very low risk investment. Certificates of deposit are FDIC-insured, and therefore guarantee a return of principal. FDIC insurance, however, will only cover up to $100,000 for this type of investment, and therefore most jumbo CDs and any
A jumbo CD is a CD in a very large denomination, usually at a minimum of $100,000 thousand. Jumbo CDs are commonly bought by large institutional investors, such as banks and pension funds, who are interested in low-risk and stable investment options. Jumbo CDs are also known as negotiable certificates of deposits, and come in bearer form. It works like a conventional certificate of deposit that locks-in the principal amount for a set time frame and is payable upon maturity. To view the latest CD rates and offers click here.
