Market linked CD’s are perhaps the best kept secret in banking. More than twenty years ago, a few major banks started offering their special customers certificates of deposit that were ‘linked’ to gains in a stock market index. But provided complete protection against stock market losses.
Unlike direct stock market purchases, funds placed in these new types of bank CD’s cannot lose money if the stock market crashes. However, when the market index rises, a percentage of the gain is credited to the CD as interest. Like all bank CD’s, Market Linked CD are FDIC insured.
As one would expect, market linked bank CD’s are a little more complicated than traditional certificates of deposit. Learning about these unique CD’s can increase your returns. Don’t let this one pass you by. Higher long term gains and complete FDIC insurance is a powerful financial combination.