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A certificate of deposit (CD) is a time deposit sold by banks, thrift institutions, and credit unions in the United States. CDs typically differ from savings accounts because the CD has a specific, fixed term before money can be withdrawn without penalty and generally higher interest rates. CDs require a minimum deposit and may offer higher ...
Unlike with a non-callable CD, the issuer of a callable CD can call (or pay back) the CD before its maturity date. If it does, the issuer pays the CD holder a set amount and closes out the account.
A variable-rate CD — also called a flex CD — is a type of certificate of deposit with an interest rate that can fluctuate periodically over the term of the CD based on market conditions.
The participation rate is the percentage at which a market-linked CD's annual return will correspond to the performance of the index it is tied to. [8] For example, an index sees a 20 percent gain, but the indexed CD has a participation rate of 80 percent. The CD will produce a return of 16 percent, which is 80 percent of 20 percent.
Fully Callable Bonds. Can be called at any time after the call date if applicable. Common among corporate bonds. Partially Callable Bonds. Only a portion of the bond can be called, not the full amount
The largest market for callable bonds is that of issues from government sponsored entities. They own many mortgages and mortgage-backed securities. In the U.S., mortgages are usually fixed rate, and can be prepaid early without cost, in contrast to the norms in other countries. If rates go down, many home owners will refinance at a lower rate.
A no-penalty CD — also called a liquid CD — is like a traditional CD through which you lock in a deposit for a guaranteed rate of return over a stated period of time, but with the flexibility ...
A security is a tradable financial asset.The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction.In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition.