A certificate of deposit is a bank security, which is a confirmation of the right of a depositor to receive a certain amount of cash and interest at the end of the validity of a security. The term of validity of a certificate of deposit is usually from several weeks to several years. As a rule, you can redeem a certificate of deposit at any time, but then interest on it is accrued according to the scheme for calculating interest on demand deposits. This type of certificate can only be acquired by legal entities and private entrepreneurs, therefore they are acquired only by bank transfer.
A certificate of deposit acts as an excellent tool for investing funds of legal entities. All banks set a minimum amount of a certificate of deposit, which is available not only to large enterprises, but also to small businesses. The interest rates on such securities are very attractive, cashing out quickly and without much difficulty, therefore certificates of deposit are often purchased by legal entities for settlements.
Like most securities, a certificate of deposit can be used for settlements or as collateral when obtaining a loan. Registration of the assignment of the right of claim is confirmed on the back of the certificate. Most often, transactions for the purchase and sale of certificates are made in the same bank where they are issued. Sometimes restrictions are imposed on the use of certificates, and then these securities are stored in the bank. The minus of the certificate with the limitation is that its owner cannot transfer ownership of the security to anyone, and the plus is a larger percentage of this certificate of deposit.
In large Russian banks, it is usually not a problem to purchase a certificate of deposit. If you purchase certificates of deposit from Sberbank, you will also be given certificates of purchase, which, if the original is lost, will help to obtain a duplicate of the security. Sberbank certificates are usually urgent (valid for one year) and registered, that is, bearer certificates of deposit, although the right of claim can be transferred.
A certificate of deposit of Sberbank becomes a demand document if the term for receiving a deposit expires, that is, its owner receives a sum of money on the very day when he needs it. The Savings Bank certificate of deposit cannot make payments for goods or services, but the bank may accept such a security as collateral when issuing a loan to the holder of a certificate of deposit. Sberbank has such a security as a savings certificate with a floating interest rate and a face value of 1, 10, 50 thousand rubles. A feature of this certificate is that it is sold to individuals and is a bearer certificate.
Other commercial banks also issue certificates of deposit, but their main drawback is that the state does not guarantee the safety of their deposits. However, they apply deposit insurance and keep mandatory reserves with the Central Bank of Russia to increase depositor guarantees. In addition, the sweeping bank is responsible for the formation of bank insurance funds, which are mandatory. They can serve to cover the financial risks of these banks, deposit insurance, compensation for possible losses of customers. In addition, there is such a clause in the legislation that allows the Central Bank of Russia to use the reserves it holds as collateral for government debt obligations, which is evidence of a new level of legal relations in Russian savings business.