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Yankee CD

What is 'Yankee CD'

A certificate of deposit (CD) that is issued in the United States by a branch or agency of a foreign bank. A Yankee CD is a foreign certificate of deposit denominated in U.S. dollars, issued in the U.S. to American investors. A foreign company can raise capital from U.S. investors by issuing Yankee CDs.

Explaining 'Yankee CD'

Yankee CDs are negotiable instruments, and most have a minimum face value of $100,000, making them appropriate for large investors. Unlike traditional CDs that can be cashed before maturity for a small penalty, Yankee CDs usually cannot be cashed in prior to their date of maturity. If they are cashed in before maturity, the penalty can be substantial. Yankee CDs are usually issued in New York by foreign banks with branches in the U.S., and, in particular, New York.


Further Reading


The" other" imbalance and the financial crisis
www.nber.org [PDF]
… ties to identify and evaluate alternative strategies and courses of action, and to allow them to work more effectively with specialists with deeper expertise in finance and economics … It uses a manage- rial economics approach that involves the use of economic theories and …

Cultural distance and bond pricing: Evidence in the Yankee and rule 144A bond marketsCultural distance and bond pricing: Evidence in the Yankee and rule 144A bond markets
onlinelibrary.wiley.com [PDF]
… ties to identify and evaluate alternative strategies and courses of action, and to allow them to work more effectively with specialists with deeper expertise in finance and economics … It uses a manage- rial economics approach that involves the use of economic theories and …

Variable ticket pricing in major league baseballVariable ticket pricing in major league baseball
journals.humankinetics.com [PDF]
… ties to identify and evaluate alternative strategies and courses of action, and to allow them to work more effectively with specialists with deeper expertise in finance and economics … It uses a manage- rial economics approach that involves the use of economic theories and …

Measuring Ethnic Clustering and Exposure with the Measuring Ethnic Clustering and Exposure with the
www.tandfonline.com [PDF]
… ties to identify and evaluate alternative strategies and courses of action, and to allow them to work more effectively with specialists with deeper expertise in finance and economics … It uses a manage- rial economics approach that involves the use of economic theories and …

The financial impact of IT security breaches: what do investors think?The financial impact of IT security breaches: what do investors think?
www.tandfonline.com [PDF]
… ties to identify and evaluate alternative strategies and courses of action, and to allow them to work more effectively with specialists with deeper expertise in finance and economics … It uses a manage- rial economics approach that involves the use of economic theories and …



Q&A About Yankee CD


What is a Yankee CD?

A Yankee CD is a certificate of deposit that is issued in the United States by a branch or agency of a foreign bank.

How can foreign companies raise capital from U.S. investors?

Foreign companies can issue Yankee CDs to raise capital from U.S. investors because they are negotiable instruments and have minimum face values of $1,000, making them appropriate for large investors.

Why do most Yankee CDs have minimum face values of $1,000?

Most Yankee CDs have minimum face values of $1,000 because they are negotiable instruments that are used by large investors to raise capital from other people's money (OPM).

What makes these certificates different than traditional CDs?

Unlike traditional CDs that can be cashed before maturity for a small penalty, Yankees CDs usually cannot be cashed in prior to their date of maturity; if they are cashed in before maturity, the penalty can be substantial."

How does the interest rate on CDs compare to that of savings accounts?

The interest rate on CDs tends to be higher than that of savings accounts because they are riskier investments for banks or credit unions. However, this may not be true in an inverted yield curve environment.

What are the differences between CDs and savings accounts?

Savings accounts have no fixed term, and customers can withdraw their money at any time. CDs usually have a specific term, and customers cannot withdraw their money until maturity.

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