Difference Between An Investment Certificate and CD
A certificate is an investment product unlike a certificate of deposit (CD) offered by a banking institution. Being an investment product, it is not insured by the federal government or the Federal Deposit Insurance Corporation. Surrenders from a certificate, unlike a certificate of deposit must be reported to the Internal Revenue Service on the individual investor's tax returns. These surrenders would be shown on a 1099-R form for retirement accounts or a 1099-B for non-retirement accounts. Certificates also typically have lower surrender charges if the money is withdrawn early compared to certificates of deposits and feature a longer grace period between terms (generally between 14–16 days)Certificate of deposit.
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