Bull CD

Posted in Finance, Accounting and Economics Terms, Total Reads: 1277

Definition: Bull CD

A bull CD is a certificate of deposit whose returns are tied to a particular market index or stock. Thus, the returns on the CD are directly proportional to the fluctuations in this market index. However, the essential feature of this CD is it guarantees a minimum rate of return to its investors. So, the returns of this CD increase if the market index increases but if the index decreases below a certain limit, the holder still earns a minimum yield.

This kind of instrument is usually used by conservative investors who desire to have an exposure to stock markets but at lower risk.

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