Jumbo CD

Jumbo CDs are large-denomination certificates of deposit with balances of at least $100,000, and sometimes $1 million or more.

They tend to pay higher rates than smaller CDs and are purchased primarily by institutional investors. However, they're increasingly marketed to individual investors as low-risk, fixed-income assets.

Jumbo CDs may be negotiable or non-negotiable. Negotiable CDs may be traded in the secondary market and are often issued in bearer form, which means that physical possession of the paper document is the sole proof of ownership. The banks that sell bearer CDs keep no records of ownership.

Non-negotiable Jumbo CDs, like conventional CDs, remain on deposit in the bank that issued them and are held in the name of the purchaser.

These Jumbo CDs, like other bank deposits, are FDIC insured, up to $100,000 per depositor in different categories of taxable accounts in each bank and up to $250,000 if they are held in self-directed retirement accounts, such as an individual retirement account (IRA).