NCDs are instruments issued by a financial institution certifying that a deposit has been made with that institution, which is payable on surrender of the certificate at maturity. It is a type of wholesale deposit. The issued NCD can be traded in the secondary money market at a negotiated rate, which reflects the tenor of the paper and the liquidity prevailing in the money market.

At maturity, the NCD is presented to the issuing bank for settlement of the maturing deposit plus interest.

Types