Who typically issues certificates of deposit (CDs)?

• A. Banks
• B. Corporations
• C. Central banks
• D. Governments

Answer: (A)

CDs are time deposits that banks issue to customers, offering a fixed term and a fixed interest rate in exchange for keeping the money deposited until maturity. This is why banks are the typical issuers of certificates of deposit. Corporations mainly issue other short-term debt instruments like commercial paper, not standard consumer CDs. Central banks and governments don’t issue CDs for retail investors; they issue monetary policy tools and sovereign securities instead. So, the issuer you’re most likely to encounter for CDs is a bank.