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What is an index-linked certificate of deposit (CD)?

Index-linked CDs are similar to traditional Certificate of Deposit, but they allow the investor to participate in the appreciation, if any, of a particular stock index (like S&P 500), during the term of the CD.

An index-linked CD is a deposit obligation of the issuing bank and is often sold through bank branches and by both affiliated and unaffiliated brokers. Index-linked CDs may have complicated payout structures and may not be appropriate for all investors. Investors should carefully review the CD terms and investment risk considerations detailed in the relevant offering documents and disclosure statements.

Common names for index-linked CDs include market-linked CDs, equity-linked CDs, and market participation CDs.

Last Reviewed: April 2021

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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