Business and Personal Finance Dictionary

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• CALLABLE CD
  
  The issuer can redeem or''call'' your CD before maturity. Usually, there’s a one-year period from the date of issue before the bank or brokerage can call the CD. An issuer would call the CD if interest rates fall because the CD could be reissued at a low rate. Callable CDs have a higher interest rate because of this risk that the CD will be redeemed early. If the CD isn’t called, it continues earning the higher rate of interest, but some issuers reserve the right to call the CD every 6 months after the initial period. Callable CDs are primarily offered through brokerages, but some banks are offering them.
  
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