BY
Investors hungry for income are increasingly being pitched so- called marketlinked certificates of deposit.
But buyer beware.
With a market-linked CD, returns are generally pegged to a market index's future performance, though the principal is typically safe from market swings.
Such CDs may promise higher returns, but can be riskier than typical CDs, the
Market-linked CDs typically have longer terms than other CDs. And you'll usually face penalties for cashing in early.
You should know what investments any returns are tied to-stocks, bonds, foreign currency or other assets.
If the CD is tied to an index, ask how closely your return is actually based on that index.
Some of these CDs may be structured so your actual return can deviate significantly from that of the index, says
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Source: | Proquest LLC |
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