Issuing Banks

An issuing bank is a bank that issues a certificate of deposit (CD). The CD can be of several forms for example regular certificates of deposit (CDs), variable-rate CDs, eurodollar CDs, multi-step CDs, market-linked CDs.

It is important to verify the stability and strength of any issuing bank that you come in contact with, if you are going to be investing in that bank. For example, you want to know that the bank that issued your CD is stable. Although most issuing banks are insured by the FDIC, you may exceed FDIC insurance limits, and you may also end up with a product that is not FDIC insured.

Issuing banks can also issue credit cards, but you usually wouldn’t worry about this case since you will be borrowing the money rather than lending (investing) it to the bank. When you are the borrower you don’t care whether the bank is stable or not, you got your money and it is your creditworthiness that concerns the bank not the other way round.

Before you commit to a financial relationship of any kind with an issuing bank, be sure to consult with a financial advisor in order to evaluate the safety and wisdom of what you’re doing. You don’t want to make any mistakes when it comes to your hard-earned money.