Finance
Advantages of Certificates of Deposit
As you learned in your finance class, corporations can invest in certificates of deposit (CDs) if they have idle cash and possibly earn a higher interest rate than in a corporate savings account. Another advantage of CDs is that a corporation can choose among a variety of maturities, from three months to several years, depending on how soon it will need the cash. A third advantage is the relatively low default risk; a corporation can reasonably expect a bank will pay back the principal plus the promised interest rate at the maturity date.

Source: S. Ross, R. W. Westerfield, and B. D. Jordan, Fundamentals of Corporate Finance (New York: McGraw-Hill/Irwin, 2006), pp. 654–655.