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About Our Certificates of Deposit

What is a market-linked CD?

Many investors would like to combine the safety and security of a traditional certificate of deposit (or share certificate) with a potential return that is tied to the performance of the market without direct market risk. Market-linked certificates provide investors with 100% principal protection when held to maturity. Investors are protected against the loss of principal if the market goes down, while generating potentially positive dividends linked to the underlying asset(s).


What assets can be "linked" to market-linked certificates?

Market-linked certificates can be linked to different underlying assets, such as:

  • Market Index(es)
  • Basket of Stocks
  • Commodities
  • Exchange-traded Funds

How are market-linked certificates guaranteed?

The market-linked certificate is guaranteed by the issuing credit union if held to maturity. The original investment is also NCUA insured up to applicable limits.


How are dividends paid?

Instead of paying a fixed rate, market-linked certificate dividends are paid annually or at maturity based on the appreciation of the underlying asset(s), subject to a participation rate that may vary from issue to issue.


What terms are available to issuing credit unions?

Terms vary from issue to issue depending on market conditions. Programs available include core deposit, brokered deposit and fee-based.


Are market-linked certificates a new product?

No. Market-linked CDs were first issued by banks in 1986. The first market-linked certificates were issued in 1994.


Who should purchase market-linked certificates?

Market-linked certificates may be appropriate for various types of accounts, including:

    Share/IRA Certificate Accounts     Institutional Accounts
  • Individual Investors
  • Joint Investors
  • IRAs (Traditional / Roth / Simple / SEP)
  • College Educational Savings
  • Trust & Estate Accounts
  • Caregivers
  • Seniors
  • Wealth Management
  • Institutional Investors
  • 401(k) & Pension Plans
  • Endowments & Foundations
  • Not-for-Profit Organizations
  • Partnerships & Limited Liability Companies
  • Credit Union Portfolios

How do market-linked certificates differ from fixed rate certificates?

    Market-linked certificates     Fixed rate certificate
  • Monthly Issuance
  • Dividend tied to performance of Index
  • Credit Union's Cost of Funds =
  • Premium to Guarantor
  • MICS Service Fee
  • Daily Issuance
  • Dividend Rate Set by Credit Union
  • Credit Union's Cost of Funds = APY

Program Benefits

Safety & Growth Potential

By combining the safety and security of a traditional CD with the potential for investment return, Market-linked CDs are a "must have" for new and existing members.