a financial institution , such as a bank , issues numerous uniquely coded certificates to various individual entities in exchange for monetary value received . the holder of each certificate is entitled to receive a certain average rate of income from the monetary value represented by that certificate ; which average rate of income would generally be proportional to prevailing interest rate as well as to the monetary value represented by the certificate . to avoid the relatively high transaction costs associated with periodic payments of a relatively modest income to the holder of each of numerous individual certificates , a statistical method is used . by way of this statistical method , a relatively few of the numerous uniquely coded certificates are randomly chosen at the end of each of a continuous sequence of time periods , and all the income attributable to all the issued certificates for the associated time period is then paid to the holders of the relatively few certificates chosen for that time period . alternatively , the earnings resulting from the monetary values received are simply retained and added to the total fund of money underlying the certificates , thereby causing the monetary value of each certificate to grow over time . thus , the total earnings attributable to a given certificate is continuously cumulated and added to the value represented by that certificate .