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Structured Investments

Did you know you can preserve capital and limit risk, but still participate in the market?

What are Market Linked Certificates of Deposit?

Market Linked CDs (or MLCDs) are an investment offered by a bank and purchased in your investment account or IRA. They are FDIC insured against loss of principal at maturity and provide the opportunity for market participation and growth through performance linked to an underlying asset such as stocks or bonds.

Some of the Benefits and Risks when Investing in MLCDs

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MLCDs are FDIC insured and offered by some of the nation’s largest, and well-known banks

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They allow you to invest and have the potential for higher returns than traditional CDs while offering you the financial confidence of knowing that they are principally protected through FDIC insurance if held to maturity. However, there is no guarantee that any amount in excess of the principal invested will be paid at MLCD maturity.

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They usually have terms between 2 years and 7 years.

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Market Linked CDs provide the opportunity for market participation in the performance of the underlying asset, without sacrificing the security of a CD.

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Liquidity risk will exist if the issuer chooses not to maintain a secondary market. Available liquidity may vary by issuer. Early withdrawal is generally not permitted. There may be substantial penalties for early withdrawals.

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Investors who sell MLCDs prior to maturity are subject to secondary market risk including the risk of loss, as the market price may be less than the initial principal or face value. There is no guarantee of principal return unless the MLCD is held to maturity.

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Any amount higher than the maximum amount insured by the FDIC is an obligation of the issuer and is not insured by the FDIC.

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Opportunity Cost can be defined as the forgone “risk-free rate of return” that would be received if the principal was invested in other fixed income investments.

Investors should carefully read the disclosure statement and all offering documents prior to investing. These documents contain a detailed explanation of the risks, tax treatment, and other relevant information about the investment. Additionally, investors should consult their accounting, legal, or tax advisors before investing. Market-Linked CDs are sold through financial professionals. For a full list of potential risks, please visit the SEC’s website

Please note that the basic FDIC Deposit insurance coverage limits are: Single accounts (owned by one person) $250,000 per owner; Joint accounts (two or more persons) $250,000 per co-owner; IRAs and certain other retirement accounts $250,000 per owner; and Trust Accounts $250,000 per beneficiary subject to specific limitations and requirements.