Term deposits, CDs & T-Bills
About this course
The three primary fixed-rate sterling money market investments. Discount instruments, yield-to-maturity calculations, secondary markets, and a decision framework for picking the right tool.
What you'll learn
- What each instrument is
- Discount instrument mechanics
- CD pricing
- Choosing the right tool
Part of these pathways
Related courses
- SONIA Forward Curve & OIS
- Money Market Funds (CNAV / LVNAV / VNAV)
- Short-duration bond funds & VNAVs
- Intra-LA borrowing & lending markets
- DMADF deep dive
- Gilts as treasury investment
Common questions
What is ACT/365?
Day-count convention for sterling money market instruments. Interest = principal × rate × days / 365.
What is Certificate of Deposit (CD)?
A tradable receipt for a deposit at a bank. Same economic exposure as a term deposit, but you can sell it before maturity in the secondary market.
What is Coupon vs yield?
Coupon is the stated rate on a CD or bond. Yield is the rate of return given the price you actually pay. For a CD bought at par, coupon = yield. For one bought at a discount or premium, they differ.
What is Discount instrument?
A security sold below face value (£100), with no coupon, that pays £100 at maturity. The 'interest' is the difference between what you pay and what you receive.
What is FSCS?
Financial Services Compensation Scheme. Protects retail deposits up to £85k per banking group. Does NOT cover local authority deposits — LAs bear full credit risk.
What is Money market broker?
Intermediary connecting cash investors with deposit-taking banks. Earns a small spread; provides market intelligence and rate comparison.