Callable Step-Up Federally Insured Certificates of Deposits

Callable Step Up Federally Insured Certificates of Deposit or Callable Step-Up Federally Insured deposits (FID) are similar in structure to a "step-up" or "multi-step" bond. A step-up Federally Insured certificate of deposit is a callable certificate of deposit (CD) with a coupon rate that increases according to a preset schedule until the Federally Insured Deposit matures or is called.

How Federally Insured Certificates of Deposit work...

A Federally Insured Certificates of Deposit's initial coupon rate is locked in and paid to investors until the first call date.

At the first call date of the Federally insured certificates of deposit, one of two things will happen:

The Federally Insured Certificates of Deposit will be redeemed at par plus any interest accrued to the call date.

• If the  Federally Insured Certificates of Deposit or FID is Not Called:

The coupon rate of the Federally Insured Certificates of Deposit is reset according to the preset schedule.

This process continues until the Federally Insured Certificates of Deposit or FID is either called or reaches final maturity.