Investing in bull CD’s – getting the best of rising market index

When investor wants risk free investments in the stock market, but also wants to take the advantage of the fluctuation in the stock market, the best investment plan is the bull CD. Bull CDs are investment plans that expose the investors to the basics of stock market, at the same time protecting them from the unwanted risks of losing the money. Since it is a certificate of deposit, it works pretty much the same as other certificates of deposits, but with some differences.

A Bull CD provides interest rates in comparison with an underlying market index. When the interest rates in the market goes up, the interest rates for the bull CD goes up too. This way, the investor gets to take advantage of the rising interest rates of the market for the investment. But the best feature of the bull CD investment is that the bank will pay a minimum amount of returns for the CD irrespective of the drop of interest rates, so the investor is not exposed to the risks of the stock market.

Every bank has different interest rates for the bull CD and accordingly has the minimum returns payable for the investment. Comparing interest rates from different banks is the first step in finding the bull CD that suits the needs. The investor wishing to put money in the bull CD is actually placing bets that the market will actually prosper during the time of the investment. But to be very sure that the bull CD is safe for its time period, it is better to get the CD FDIC insured. This way, the investment along with the interest earned will not be lost during a market fluctuation or, in the unlikely event of the bank shut down.

The best time to invest in a bull CD is during the gradual rise of interest rates in the market. But it is not advisable to leave the investment in the bull CD for too long a time, since the market rates always fluctuate. It is a safer idea to reinvest the amount earned in a bull CD in multiple investments to get a robust investment plan running.

This is ideal investment plan for people who are new to the stock market, and who want a better savings plan than a savings account. Bull CDs are best to get a taste of stock market, and yet be safe from the losses, since the investor is sure of a guaranteed return.