Time Certificate of Deposit Law and Legal Definition

Time certificate of deposit is an instrument issued by a bank narrating that the person named therein has deposited in the bank the sum specified, payable with interest to the order of himself on the return of the certificate properly indorsed.

The time certificate of deposit is for a fixed-term interest-bearing deposit in a large denomination. It consequently pays higher interest than a savings account, though the investor who withdraws money before its maturity date is subject to a penalty.