Structured certificates of deposit (“SCDs”) are financial instruments representing a deposit of a specified amount of money for a fixed period of time. As with traditional certificates of deposit (“CDs”), SCD holders are entitled to their principal, plus possible additional payments. However, unlike traditional CDs, which usually pay interest periodically based on a fixed or floating rate, SCDs may pay an additional payment at maturity or periodic interest payments based on the performance of a reference asset, such as one or more equity securities, an index, or one or more currency exchange rates. SCDs are customizable and can be tailored to fulfill specific investment objectives.
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