Here is one general summary …
About Market Linked CDs
- Equity Exposure – MLCDs offer the opportunity to participate in upside performance of an underlying market measure, subject to the terms of each specific MLCD. Participation rates and performance caps may limit investor’s returns relative to the performance of the underlying asset. The amount of any interest payments on the CDs is uncertain, may be zero and may be subject to a cap.
- 100% Principal Protection – The principal portion of an MLCD is guaranteed by the issuing bank when held to maturity. Early withdrawal, in addition to penalties which may apply, could lead to a loss of principal.
- FDIC Insured – FDIC insurance protects the deposits up to $250,000 for all deposits held in the same capacity per depositor, per institution.*
- Diversification – Various MLCDs may track a variety of domestic and/or global indices.
- Low Minimum Investment – MLCDs are available for a minimum investment of $25,000 and increments of $1,000 thereafter.
- Estate Feature – Allows for redemption of the full principal amount at par, without interest, upon death or the adjudication of incompetence of the beneficial owner under certain circumstances, subject to the terms of the specific MLCD.
Secondary Market – Secondary markets for these securities may or may not exist.