Document background
A Certificate of Deposit (CD) is a crucial financial instrument in the Indian banking system, primarily used for short to medium-term investment purposes. It is issued by scheduled commercial banks and select financial institutions under strict RBI guidelines, serving as evidence of a time deposit ranging from 7 days to one year. The document becomes necessary when an investor (individual or corporate) wishes to make a substantial deposit (minimum amount as prescribed by RBI) in return for a higher interest rate than regular term deposits. CDs are particularly valuable for institutional investors and corporations managing their treasury operations, as they offer flexibility through their negotiable nature in the secondary market. The document must comply with RBI's master circular on CDs, which governs aspects such as eligibility, maturity, transfer restrictions, and interest calculations.
