variable-rate certificate of deposit(redirected from Variable Rate Certificate of Deposit)
Variable-Rate Certificate of Deposit
A certificate of deposit for which the interest rate changes according to some formula at set intervals. Investors use variable-rate certificates of deposit when they want a low-risk investment but expect prevailing interest rates to rise during the life of the CD. See also: Variable-rate bond.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
variable-rate certificate of deposit
A certificate of deposit that pays a rate of interest that changes at predetermined intervals according to a specified formula or a key interest rate. This savings instrument is most appropriate if the investor expects short-term interest rates to rise before the certificates mature.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.