# 🥑 Certificate Deposits

By [Let Them Eat Cake](https://paragraph.com/@ltecake) · 2022-06-21

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**TL,DR: Like an unripe Avocado, CD’s require patience**

CD / Unripe Avocado

*   not immediately consumable
    
*   pays off to wait and punishes those who don’t
    
*   not technically a vegetable or bond but operates similarly
    

Eatamology CD stands for “Certificate Deposit”, which refers to the action of depositing money into the bank in exchange for a record of the transaction, the certificate. Like an unripe avocado, the investor must wait for the product to ripen before reaping the benefits.

Financials CD’s are essentially loans to a bank that incur early withdrawal fees. Banks lock up the money for the time agreed to on the certificate, paying increasingly more interest with a longer loan period. The contracts can last from 3 months to 30 years, and pay relatively low interest even for the long maturity deals, since the contract comes with significant guarantees from the bank and likely includes FDIC insurance for investments of up to $250,000. By consistently investing in CD’s, consumers can unlock the power of Compound Interest.

FDIC | FDA

The FDA (Federal Drug Administration) exists to keep consumers safe and instill confidence in safe products. The FDIC (Federal Deposit Insurance Corporation) exists to “maintain stability and public confidence in the nation’s financial system”. It’s a government agency looking to protect consumer deposits and encourage investments into the system, rather than the collection of cash at home and under the mattress. With more money in the system, businesses that need $ can find, and people with extra money can earn interest.

Nutrition Facts Price: Par Issue Frequency: Maturity: Interest/Coupon Amount: Low Coupon Type: Fixed Yield: Low Cash Equivalent: Yes

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*Originally published on [Let Them Eat Cake](https://paragraph.com/@ltecake/certificate-deposits)*