Is it permissable for a national bank to have a CD at its own institution? Are there guidelines or rules for that? I assume the terms and conditions of that CD would be the same as any other customer who had one of like term.

For what purpose??? I would say no - it would artificially inflate both assets and liabilities.

Apparently it is some type of employee retirement plan - I am assuming (at this point) an account that is used as a holding account until investments can be made through a broker or hold funds from a broker until they can be distributed to an employee. It just seemed very strange to me. I'm still researching.

If the bank is holding or investing the money in a fiduciary capacity, whether or not investing in CD's at the bank is acceptable will be governed under the fiduciary agreement documents.