A certificate of deposit differs from a promissory note in that:
A) the maker is always a bank.
B) there are three parties to the transaction.
C) the payee of a CD must be paid on demand.
D) the maker can be a bank or an individual.

Question

A certificate of deposit differs from a promissory note in that:
A) the maker is always a bank.
B) there are three parties to the transaction.
C) the payee of a CD must be paid on demand.
D) the maker can be a bank  or an individual.

Quizplus · Accepted Answer

A certificate of deposit (CD) is a financial product offered by banks and credit unions that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period of time. Unlike promissory notes, which can be issued by individuals or entities as a form of debt instrument, CDs are exclusively issued by banking institutions.

A Certificate of Deposit Differs from a Promissory Note in That