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Will I receive periodic interest payments on my index-linked Certificate of Deposit (CD)? Are these payments taxable?

Unlike traditional CDs, periodic interest payments are typically not paid on an index-linked CD. However, investors are required to include a "comparable yield" in their gross income each year for federal income tax purposes, even though no cash payments may be made to the investor on these CDs until maturity.

Last Reviewed: October 2020

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency (OCC). Find out if the OCC regulates your bank. Information provided on HelpWithMyBank.gov should not be construed as legal advice or a legal opinion of the OCC.

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