Variable Rate CD

Variable Rate CD Meaning:
A variable rate CD (certificate of deposit) is a type of bank deposit account product issued by a financial institution such as a bank. The interest rate on this product can go up or down at set periods or change depending on an index but may be different depending on each bank. These indexes or benchmarks may include but not limited to U.S treasury notes/bills, CPI or prime rate.

Variable Rate CD Example:
For U.S investors this can provide a higher yield than a savings account and some institutions offer unlike a fixed CD the flexibility to make additional deposits. In particular investors may tend to invest in a variable rate CD if they anticipate rising interest rates but they do risk to having a lower rate CD compared to a fixed CD if rates fall.
Related Rates
  • List of US Certificate of Deposit Rates (CDs) by Banks