variable-rate certificate of deposit

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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.

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.
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On the other hand, the bank has decided to reduce the interest rate of three-year variable-rate certificates by 1% to 16% instead of 17%.
Al Ahli Bank of Kuwait (ABK) reduced the interest rates of its triple variable-rate certificates of deposit to 18%, to be paid every three months, and 17.75%, to be paid monthly.
The Arab Investment Bank (AIB) also lowered the interest rates of its triple variable-rate certificates of deposit to 17.75%, to be paid every three months, and 17.25%, to be paid monthly.
The Export Development Bank of Egypt also reduced the interest rates of its triple variable-rate certificates of deposit to 18.75%, to be paid every three months.

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