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
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