DEFINITION of 'Bull CD'

A certificate of deposit whose interest rate fluctuates in direct correlation to the value of an underlying market index. In other words, the interest rate paid on the CD increases as the value of the market index increases during the life of the CD.

BREAKING DOWN 'Bull CD'

This type of CD is most often used by investors looking for a very safe investment that also gives them exposure to the stock market. The CD interest rate does not lose value if the market falls in value because there is a minimum rate that has to be paid.

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