Add-On Certificate of Deposit

  

You bought a CD. A certificate of deposit from a bank, arguably the safest bond investment you can make. If it has an add-on feature, you can, uh..."add-on" to your initial investment.

Why would you want to add-on to an existing investment, rather than buy a new CD? It's not like they're a rare stamp. Well, CDs carry a stated interest rate in the form of a discount to their eventual maturity and payoff of principal. So if interest rates suddenly drop to, say, 2.3% when they were 2.6% just last week, an investor would likely be wise to add-on to their initial investment and hope the world doesn't end before the CD matures.

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well yeah it's strange but the practice exists and it's a huge multi trillion

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