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Index Linked CDs: Equity Participation + Principal Protection

As Security Specialists to the Institution Community Financial Northeastern has originated Index Linked Certificates of Deposit for issuers like HSBC Bank USA, Suntrust Bank, Chase Manhattan Bank USA and Wachovia Bank.

Instead of paying a fixed rate of interest, Index Linked Certificates of Deposit pay interest at a rate that is tied to the return of a domestic or international market index. Principal is fully protected if the CD is held to maturity, even if the market declines. Index Linked CDs are FDIC Insured Certificates of Deposit held in a brokerage account and carry terms from 3 to 6 years.

Index Linked CDs are extremely flexible and can include a wide variety of features including:

• Periodic Lock-in Option (Averaging) Fixes the value of an index on a quarterly or semi-annual basis
  

• Minimum Return Option Provides a minimum cashflow at maturity regardless of the return of the index

• Leveraged Participation Rate Option Offers returns that exceed the increase in the index

• International and Domestic Exposure CDs are tied to one or more indices (Index Baskets) that provide access to growth opportunities around the globe

• Inflation Protection Some CDs are tied to commodities or the change in the Consumer Price Index

We invite you to contact FNC for more information on how these innovative offerings could fit into your financial strategy.

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