A Al-Rawi Group Ltd Wealth Management & Financial Advisory
Instrument — 07

Certificate of Deposit (CD)

Bank-issued instruments representing deposited funds — commonly used as collateral and proof-of-funds documentation.

What is a Certificate of Deposit?

A Certificate of Deposit is a bank-issued instrument confirming that a sum of money has been deposited with the issuing bank for a specified term. It records the principal amount, the interest rate, and the maturity date, and represents a time deposit that the bank is obliged to repay.

Because the CD is backed by the issuing bank's obligation, it is widely accepted as evidence of funds and as collateral in a range of financing arrangements.

Common use cases

  • Collateral — securing loans and credit facilities against the deposited amount.
  • Proof of funds — demonstrating the availability of funds in transactions and tenders.
  • Trade support — underpinning trade finance structures.
  • Liquidity management — earning interest on held funds with a defined maturity.

How we help

We advise on the appropriate structure for the client's objectives, coordinate the placement of funds through established banking channels, and support the verification and documentation required by counterparties.

Placement requires real funds. A Certificate of Deposit is issued only against funds actually deposited with the issuing bank. Any proposal offering "paper" CDs without a corresponding deposit should be treated with extreme caution.

Frequently asked questions

A proof-of-funds letter is a bank statement confirming account balances, while a Certificate of Deposit is a time-deposit instrument with a defined term and interest rate. Both serve as evidence of funds; a CD additionally represents a contractual claim on the bank.

Yes. Banks and financiers commonly accept CDs as collateral for loans and facilities, subject to the policies of the receiving institution and any lien or pledge arrangements.

Terms typically range from a few months to several years, depending on the depositor's requirements and the issuing bank's products.

Next step

Looking to structure a CD arrangement?

Contact our advisory team to begin a confidential assessment of your requirements.

Arrange a Consultation