bump-up CD

Definition

Bump-up Certificate of Deposit. Financial instrument held for short-term or medium-term investments, which offers investors a one-time right to increase his or her interest rate to the current interest rate until the CD matures. If the investor chooses to do this, and then interest rates decrease, investors are under no obligations to decrease their yield. Investors cannot arbitrarily choose a higher interest rate but must go with what the market is yielding.
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