Additionally, paste this code immediately after the opening tag:

Negotiable Certificates of Deposit (CDs)

Negotiable CDs are unsecured interest-bearing time deposits issued at face value.  These money-market securities are typically issued by banks.  The investor (the lender) loans money to the bank (the borrower) and in return receives semi-annual interest payments.  The principal (face-value) and final interest payment is made to the investor at maturity.  Other features of negotiable CDs include:

  • If the CD’s face value is greater than $100,000 it is negotiable. A negotiable CD allows the owner to sell it in the secondary market to another investor at any point in time, i.e. prior to maturity. The CD does not need to be redeemed at the bank.
  • During the life of the CD, the product may pay semi-annual interest payments
  • The market value of the CD will depend on prevailing interest rates, and accordingly these products would face interest rate risk.  i.e. if you have a 3% CD and rates go up to 6%, the value of your CD declines.


It is important that test-takers identify negotiable CDs as money market securities.  Money market securities are short-term (maturing in less than one-year), high-quality debt securities, and are typically suitable for investors seeking safety and principal protection.  Don’t forget one very liquid way to invest in negotiable CDs is through a money market mutual fund.  These investments will also generally produce monthly income.


Dave's mission (and job: Managing Director of Course Design) is to make FINRA exam training engaging, approachable, and dare he even say, enjoyable. Having trained and coached over ten thousand students to exam success he knows how to present complex subjects in memorable and understandable ways. Prior to joining Knopman Marks in 2011, Dave practiced bankruptcy law at Weil, Gotshal & Manages and served as a law clerk in a the Southern District of New York Bankruptcy Court working on the General Motors and Lehman Brothers bankruptcies. Building on his legal expertise and training allows him to keep all our courses updated with the latest legislative and rule-making changes. Dave currently trains for the Securities Industry Essentials (SIE) exam and the Top-Off Series 6, 7, 24, 57, 63, 65, 66, 79, 86, 87, and 99 exams. He also delivers executive one-on-one training and shares his passion for learning outside of work as a ski instructor and yoga teacher. Dave graduated magna cum laude from Fordham Law School, and cum laude with a BA from the University of Pennsylvania.