Factors to Consider before purchasing Market Linked – Indexed CDs
- Issued by select banks
- Return linked to an asset index
- FDIC insurance when held to maturity
- Guarantee of principal
- Full protection from all market losses
- Do not have liquidity of traditional CDs
- Potential for higher returns than traditional CDs
- Careful selection is highly advised
- Intermediate term maturities
- Returns taxed at income tax rates
- Regulations unclear on some tax aspects
- Excellent choice for IRA and Roth IRA