Investing in Certificates of Deposit: The Basics, explains the workings of CDs and the many features that distinguish one CD from another, including an explanation of brokered CDs, liquidity, length of maturity, various interest calculations and terms, interest payment procedures, early withdrawal and taxation.

This brochure provides you with basic information about investing in certificates of deposit ("CDs") issued by banks, savings associations and other depository institutions* whose deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”).

WHAT ARE CERTIFICATES OF DEPOSIT?
CDs are time deposits – you agree to place your funds on deposit with the bank for a stated period of time. During the term of the CD your funds earn interest at a stated interest rate or based upon an agreed method of calculating the rate, such as the percentage increase in the stock market.

Because you agree with the bank to keep your funds on deposit for a period of time, CDs may offer you a higher rate of interest than other types of deposit accounts that allow you more immediate access to your funds, such as checking and savings accounts. Generally, the longer you are willing to let the bank keep your funds, the higher the rate you will receive on your CD.

Most banks are members of the FDIC, a government agency that insures bank deposits. You are eligible for $100,000 of deposit insurance for all the deposits you own at one bank in each recognized ownership capacity. For example, all the deposits (CDs, checking accounts, etc.) you own at one bank in your own name are insured up to a total of $100,000. You are eligible for an additional $100,000 for all deposits you own at one bank in joint accounts and another $100,000 for Individual Retirement Accounts.

The FDIC’s brochure “Your Insured Deposit” explains deposit insurance coverage in more detail. You can obtain the publication from the FDIC and from most banks and securities brokers. You can contact the FDIC by mail (550 17th Street, N.W., Washington, D.C. 20429), by phone (800-276-6003) or by e-mail (publicinfo@fdic.gov). You can also visit the FDIC Website at www.fdic.gov.

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You can download Investing in Certificates of Deposit: The Basics in PDF format.

Developed by the Securities Industry Association in conjunction with The Bond Market Association.

ABOUT THE BOND MARKET ASSOCIATION
The Bond Market Association is the trade association representing the largest securities markets in the world, the $17 trillion debt markets. Its membership includes securities firms and banks that underwrite, trade and sell debt securities.

The Association acts as an advocate for industry positions and informs and educates the public about the role of the bond markets and the global economy. The Association publishes newsletters and education materials, presents seminars and conferences and publishes bond markets-related statistics. These efforts are aimed at increasing the level of professionalism in the industry and raising publish awareness of the importance of the bond markets.

More information about the Association is available on its Web site: www.bondmarkets.com.

ABOUT THE SECURITIES INDUSTRY ASSOCIATION
The Securities Industry Association brings together the shared interests of nearly 700 securities firms to accomplish common goals.

SIA member firms (including investment banks, broker-dealers, and mutual fund companies) are active in all U.S. and foreign markets and in all phases of corporate and public finance. The U.S. securities industry manages the accounts of nearly 80 million investors directly and indirectly through corporate, thrift, and pension plans, and generates $358 billion of revenue.

Securities firms employ approximately 760,000 individuals in the United States. (More information about SIA is available on its home page:http://www.sia.com.)

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