[1] A certificate allows the investor to make an investment and to earn a guaranteed interest rate for a predetermined amount of time.
The investment certificate was first introduced to the public in 1894 by John Elliott Tappan, the founder of the erstwhile Investor's Syndicate, today known as Ameriprise Financial.
After the selected length of time had passed, or at maturity the principal and interest were returned to the investor.
[1] Surrenders from a certificate, unlike a CD, must be reported to the Internal Revenue Service on the individual investor's tax returns.
[2] Certificates also typically have lower surrender charges if the money is withdrawn early compared to CDs and feature a longer grace period between terms (generally between 14 and 16 days).