What is FLOATING RATE CERTIFICATE OF DEPOSIT (FRCD)?

A CERTIFICATE OF DEPOSIT issued by a BANK that pays a monthly, quarterly, semiannual, or annual COUPON based on a floating INTEREST RATE, often LIBOR or EURIBOR. The most common FRCDs have a sixmonth maturity and a 30day roll (e.g., ACCRUED INTEREST is paid every 30 days and the new coupon is set) and a 12month maturity with a 90day roll. Also known as VARIABLE RATE CERTIFICATE OF DEPOSIT (VRCD). See also LOCKUP CERTIFICATE OF DEPOSIT, NEGOTIABLE CERTIFICATE OF DEPOSIT.

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