Primary Market
Written by
Chris Chisholm
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In good times and bad, everyone wants to make as much money as they possibly can. More money means more choices, more security, and more freedom. By making money we expand our world. In that same spirit, we want to put that money to work for us so that we don’t have to worry about our financial future. We do this by investing. Many people invest in certificates of deposit, or CDs. CDs are a type of promissory note, sold by banks and other kinds of financial institutions, that guarantee us a return on our investment through an interest rate applied to the amount of the CD. Certificates of deposit are issued in what is known as the primary market.
The term “primary market” refers to the place where securities, such as certificates of deposit, savings bonds, and stocks, are offered for the first time. They are offered on the primary market by their issuer, such as a corporation, or a bank. The primary market is where securities such as these make their first debut, so to speak. In the case of CDs, they can be purchased in the primary market, but they can’t be sold in it. The primary market, also referred to as the New Issue Market, is where sellers of security meet their investors. It’s the way companies and governments raise money for their needs.
To learn more about certificates of deposit, the primary market, and other aspects of the world of high-finance, be sure to consult with a financial advisor. He or she can walk you through the pros and cons of buying CDs, as well as educate you on all the many obscure topics, like primary market. By being better informed you’ll be more likely to make smart investment decisions and less likely to make costly mistakes.
