Negotiable Certificate of Deposit
Last reviewed: September 2, 2026
A negotiable certificate of deposit (NCD) is a large-denomination bank deposit instrument that can be sold or transferred in the secondary market before maturity.
How it differs from an ordinary CD
A normal retail certificate of deposit is typically held directly by the depositor and may impose an early-withdrawal penalty. A negotiable CD is designed for institutional or large investors and can generally be traded.
Why banks issue them
Negotiable CDs are one way banks raise short-term or medium-term funding. The yield reflects maturity, market interest rates and the perceived credit quality of the issuing bank.
Main risks
Market value can change as interest rates move, and credit exposure depends on the issuer and the structure of the instrument. Deposit-insurance treatment also depends on applicable rules and ownership details.