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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Investing in Fixed Income Securities

In the Indian debt market, a Certificate of Deposit (CD) is best described as:

A Certificate of Deposit is a negotiable money market instrument issued by banks against funds deposited for a fixed period. It is unsecured, short-term in nature and transferable, which distinguishes it from equity-linked products, government securities or RBI liquidity instruments.

  1. AA negotiable money market instrument issued by banks against funds deposited for a fixed periodCorrect
  2. BA long-term equity-linked instrument issued by companies
  3. CA government security with maturity above 10 years
  4. DA short-term instrument issued by the RBI to absorb liquidity

Explanation

Certificates of Deposit are unsecured, negotiable money market instruments issued by scheduled commercial banks and select financial institutions in dematerialised form against deposits. They are not equity-linked, not government securities, and not issued by the RBI.

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