Variable-Rate Certificate Of Deposit

AAA

DEFINITION of 'Variable-Rate Certificate Of Deposit'

A certificate of deposit (CD) with a variable interest rate. The rate can be determined by a number of mediums, such as the prime rate, consumer price index, treasury bills or a market index. The amount paid out is usually based on a percentage difference between the beginning index and the final index.

INVESTOPEDIA EXPLAINS 'Variable-Rate Certificate Of Deposit'

A certificate of deposit is generally considered to be one of the safer ways to invest your money. It is the perfect choice for the conservative investor, or to diversify the risk of your portfolio. When looking to step up the risk just a little bit, considering a variable rate CD may be a good place to start.

RELATED TERMS
  1. Variable Interest Rate

    An interest rate on a loan or security that fluctuates over time, ...
  2. Maturity Date

    The date on which the principal amount of a note, draft, acceptance ...
  3. Personal Finance

    All financial decisions and activities of an individual, this ...
  4. Prime Rate

    The interest rate that commercial banks charge their most credit-worthy ...
  5. Callable Certificate Of Deposit

    An FDIC insured certificate of deposit (CD) that contains a call ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
Related Articles
  1. Certificates Of Deposit
    Bonds & Fixed Income

    Certificates Of Deposit

  2. Mortgages: Fixed-Rate Versus Adjustable-Rate
    Credit & Loans

    Mortgages: Fixed-Rate Versus Adjustable-Rate

  3. Callable CDs: Check The Fine Print
    Investing Basics

    Callable CDs: Check The Fine Print

  4. How Interest Rates Affect The Stock ...
    Investing Basics

    How Interest Rates Affect The Stock ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center