Floating-rate contract

(redirected from Floating-Rate Contracts)

Floating-rate contract

An guaranteed investment instrument whose interest payment is tied to some variable (floating) interest rate benchmark, such as a specific-maturity Treasury yield.

Floating-Rate Contract

A pension plan purchased through a bank or an insurance company for a lump sum where the principal is guaranteed by the issuer and where the payoff varies according to a variable interest rate. One may receive payments from a floating-rate contract either in installments or as a lump sum after retirement. A floating-rate contract provides the pensioner with a small interest rate that may change and is not guaranteed, but the fact that the principal is guaranteed makes it a relatively low-risk investment. A floating-rate contract is a type of guaranteed investment contract.
References in periodicals archive ?
Sales of floating-rate contracts were $400 million in the quarter, bringing total floating-rate GIC assets to $955.