Investments glossary

Variable-Rate Certificate of Deposit (CD)

A variable-rate certificate of deposit (CD) is a product offered by banks and credit unions that has a fixed term but a fluctuating interest rate. Several factors determine this CD’s rate, such as the prime rate, the consumer price index (CPI), treasury bills, or a market index. The basis for the amount paid out is on a percentage difference between the beginning index and the final index. The Federal Deposit Insurance Corporation (FDIC) protects variable-rate and other CDs.

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