Certificates of Deposit

FDIC Insured CD – Certificates of Deposit

FDIC Insured Certificates of Deposit are certificates of deposits that resemble traditional Certificates of Deposit in that they are insured by the FDIC and issued by major financial institutions.

The difference between FDIC insured Certificates of Deposit and Traditional Certificates of Deposit is that FDIC insured Certificates of Deposit may be “called”, or redeemed by the issuer before maturity.

Investors are compensated for this call possibility with FDIC insured Certificates of Deposit rates that are higher than those of traditional Certificates of Deposit.

FDIC insured Certificates of Deposit are issued with either a

• fixed coupon or a
• coupon that “steps up” according to a preset schedule until the certificate of deposit matures or is called.

FDIC insured Certificates of Deposit are an attractive investment opportunity for individuals who seek

• principal protection and
• higher yields, and
• are comfortable with the possibility of an early redemption.

Maturities of FDIC insured Certificates of Deposit typically range from five to 15 years, with one to five years call protection.

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