DEFINITION of 'Add-On Certificate of Deposit'

A certificate of deposit that allows the bearer to deposit additional funds, after the initial purchase date, that will bear the same rate of interest.

BREAKING DOWN 'Add-On Certificate of Deposit'

Add-on's or add-in's to a certificate of deposit are beneficial when investors feel interest rates will decline. By having this feature, the bearer of the CD will be guaranteed a minimum interest rate return.

Most financial institutions that permit the use of an add-on feature will require these additional deposits to meet a minimum dollar amount (typically $500).

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