The term “investment certificate” gets used in more than one way depending on where you are and who you ask. Here’s a quick breakdown.

The U.S. Definition

In the United States, an investment certificate is a product sold by an investment company or brokerage firm that offers investors a competitive, guaranteed yield along with a strong emphasis on protecting their principal. The investor deposits a sum of money, earns a set interest rate over a fixed period, and receives principal plus interest back at maturity.

The concept dates back to 1894, when John Elliott Tappan — founder of what was then the Investors Syndicate, now known as Ameriprise Financial — introduced it to the public as a “Face Amount Certificate.”

Depending on the issuing institution, U.S. investment certificates can vary quite a bit:

  • Some are highly liquid, allowing frequent deposits or withdrawals without penalty.
  • Others behave more like a certificate of deposit (CD), with fixed terms typically ranging from 3 months to 3 years, plus the flexibility to add funds or make limited withdrawals during the term.
  • Some tie their return to a market index, such as the S&P 500.

Whatever the specific structure, they all share one thing in common: a focus on protecting the investor’s principal.

How It Differs From a CD

Although it sounds similar, a U.S. investment certificate is not the same as a bank certificate of deposit. Because it’s an investment product rather than a deposit product, it isn’t insured by the federal government or the FDIC. Early withdrawals (“surrenders”) must also be reported to the IRS — typically on a 1099-R for retirement accounts or a 1099-B for non-retirement accounts. On the upside, these certificates often carry lower surrender charges than CDs and offer a longer grace period between terms, generally 14 to 16 days.

Not to Be Confused With Structured Investment Certificates

Here on iCertificates, when we talk about “certificates,” we’re referring to a different — though related — corner of the financial world: structured investment products issued by banks like BNP, Marex, Mediobanca, Leonteq, Vontobel, UniCredit, Citigroup, and Barclays. These certificates are typically linked to an underlying asset (a stock, index, or basket of securities) and carry payoff structures with their own risk and return profiles, rather than a simple guaranteed interest rate.

Both use the word “certificate,” but the mechanics, protections, and risks are quite different — which is exactly why understanding the fine print matters. That’s what we’re here to help with.

Curious how we break these down? Take a look at our ACUED Scoring Framework or explore certificates by ticker, by value, or by industry.