market-indexed CD

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Market-Indexed CD

A certificate of deposit with a variable interest rate that changes according to the performance of some stated market index. For example, the interest rate could be tied to the value of the Dow Jones Industrial Average. As with most CDs, however, the principal of a market-indexed CD is guaranteed.

market-indexed CD

A certificate of deposit that provides a return based on a specified stock index such as the S&P 500. These CDs are issued by commercial banks but are generally marketed by brokerage companies. Terms vary by issuer, but investors are generally guaranteed the return of their principal at maturity.