Market Linked CD

Market Linked CDs can return more reasonable rates than regular CDs and are FDIC insured.

Certificates of deposit that are linked to external indexes, like the stock market or commodities, are not new. They were originated by Chase in the 1980s and used to be available only for the super-rich.  Market Linked CDs, or MLCDs, are available through Covell Financial for an initial investment of only $25,000. Once an account is set up, the CDs can be purchased in increments of $1,000 and can be indexed however you choose. Regardless of what index or indexes you choose, you cannot lose money if you keep the CD to maturity.

You probably have a thousand questions about how MLCDs work and what you can expect in the way of returns. We will discuss the pros and cons of these investments in detail. The key feature to keep in mind is that MLCDs are not dependent on interest rates, which have been kept artificially low. MLCDs are keyed to one or more segments of our economy, or even global economies, not politically depressed interest rates. They provide a much better opportunity to realize a more reasonable rate of return.

Market Linked CDs are FDIC insured and are issued by major banks just like ordinary CDs, but that is where the similarity ends.