What is the most common denomination for negotiable certificates of deposit?

What is the most common denomination for negotiable certificates of deposit?

• A. $100,000
• B. $1,000,000
• C. $10,000
• D. $10,000,000

Answer: (B)

Negotiable certificates of deposit are designed for institutional buyers and traded in the money market, so they use large, standardized units to keep trading costs reasonable and liquidity high. The most common denomination is $100,000, which is the threshold that makes these instruments widely tradeable across many buyers and sellers. Denominations like $10,000 are too small to ensure the same market liquidity, while $1,000,000 or more can occur but are not the standard seen most often.

Negotiable certificates of deposit are designed for institutional buyers and traded in the money market, so they use large, standardized units to keep trading costs reasonable and liquidity high. The most common denomination is $100,000, which is the threshold that makes these instruments widely tradeable across many buyers and sellers. Denominations like $10,000 are too small to ensure the same market liquidity, while $1,000,000 or more can occur but are not the standard seen most often.