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Meaning / Definition of

Jumbo CD

Categories: Banking,

Jumbo CDs are large-denomination certificates of deposit with balances of at least $100,000, and sometimes $1 million or more. They tend to pay higher rates than smaller CDs and are purchased primarily by institutional investors. However, they're increasingly marketed to individual investors as low-risk, fixed-income assets. Jumbo CDs may be negotiable or non-negotiable. Negotiable CDs may be traded in the secondary market and are often issued in bearer form, which means that physical possession of the paper document is the sole proof of ownership. The banks that sell bearer CDs keep no records of ownership.Non-negotiable Jumbo CDs, like conventional CDs, remain on deposit in the bank that issued them and are held in the name of the purchaser. These Jumbo CDs, like other bank deposits, are FDIC insured, up to $100,000 per depositor in different categories of taxable accounts in each bank and up to $250,000 if they are held in self-directed retirement accounts, such as individual retirement accounts (IRAs).

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Definition / Meaning of

Broad-base Index

Categories: Stocks,

An index whose purpose is to reveal the performance of the entire market, such as the s&p 500, Wilshire 5000, AMEX Major market index or value line composite index. Different broad-base indices have different approaches to ensuring that the index captures the entire breadth of market activity. The Wilshire 5000 takes the most all-inclusive approach by including all the stocks listed on the new york stock exchange and almost all the stocks listed on the NASDAQ and american stock exchange. The s&p 500 includes 500 companies that are together considered a good indicator for the US stock market, based on the industries the companies operate in, their positions within the industry, and their market capitalizations. The s&p 500 is a market-weighted index, so only 10% if its components make up about 75% of its value. The value line composite index takes an in between approach by tracking 1700 issues. The Value Line Composite is thought to be a better indicator of speculative stocks than of more stable stocks.

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