The growth of the earnings on an investment's principals. Arises when an investment is sold at a higher price than originally paid. In a mutual fund, capital gains are created when the fund buys and sells underlying securities at a premium over purchase price. These gains are then distributed to unitholders at least annually. Unitholders can also earn capital gains by redeeming their fund shares at higher prices than they originally paid.
Maturities range from overnight to many years.
Certificates of Deposit are issued at par and pay fixed interest at intervals or maturity. Debt obligations issued by corporations as an alternative to offering equity ownership by issuing stock. Like most municipal bonds and Treasuries, most corporate bonds pay semi-annual interest and promise to return their principal when they mature. Maturities range from 1 to 30 years. An account for the benefit of a minor with an adult as the custodian.