Equity linked CDs can be a safer and lower-cost alternative to equity-indexed annuities for some investors. In the recent PR Web press release “Equity-Linked Certificates of Deposit: The Safer Low-Cost EIA Alternative,” Jeffrey Voudrie’s article from Guarding Your Wealth is summarized. Equity linked CDs have the benefits of FDIC insurance protecting your principal along with the ability to participate in market index upswings. While an equity indexed annuity is advertised to seniors and can be good a product for some investors, they also pay high commissions to advisors and there is a higher chance for abuse of investors.
This author believes that the equity linked CD criteria allows the product to offer the benefits of equity-indexed annuities without the drawbacks. Banks sell the CDs, whose return is linked to one of the stock market indexes. They are FDIC insured and while most have a minimum investment of $25,000, you can find $1,000 minimums if you look. Taking your money out before your term ends is the only way that your principal could be lost. You would also face a penalty in that instance, so it is best to keep your money in over the term course. Most investments are short term, around three years. Equity linked CDs can be a good investment for you, so see what you can find out there.