Why fixed deposit is non-negotiable instrument?
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Certificate of deposit are issued by banks. It is like a promissory note. The term of a CD generally ranges from one month to five years. COD is considered as risk-less because default risk in them is almost negligible. They are highly liquid and marketable, investors can buy or sell COD at their convenience. COD's are transferable, i.e. it can be easily transferred from one party to another which cannot be done with term deposits and hence it is an added advantage for investors who are willing to invest in it.
Regards
Certificate of deposit are issued by banks. It is like a promissory note. The term of a CD generally ranges from one month to five years. COD is considered as risk-less because default risk in them is almost negligible. They are highly liquid and marketable, investors can buy or sell COD at their convenience. COD's are transferable, i.e. it can be easily transferred from one party to another which cannot be done with term deposits and hence it is an added advantage for investors who are willing to invest in it.
Regards
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