Business and Personal Finance Dictionary

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• BUMP UP CD
  
  Also referred to as step up CD. This type of CD gives you a one-time option to bump up to a higher interest rate. For example, if you buy a 3-year CD at 3 percent, and one year into the term 3-year rates move to 3.25 percent, you could choose to bump up to 3.25 percent. It’s a bit of a gamble because the 3-year rate might go to 3.50 percent a few months later. You’d need to calculate a few scenarios and see which is best.
  
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