Financial Glossary: Certificate of deposit index -CODI Index


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Certificate of deposit index -CODI Index

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Certificate of deposit index -CODI Index

Certificate of deposit index -CODI Index

A table of Interest rates paid on certificates of Deposit that are used to determine Interest-rate changes for adjustable-rate mortgages.

The CODI index is calculated on or near the first Monday of each calendar month and is often used for adjustable rate mortgages. Because the CODI index is a 12-month moving average, it is not as volatile as some other popular mortgage indexes such as the one-month Libor index. It tends to lag other mortgage indexes in the rate at which it adjusts when Interest rates change.

In Exchange for keeping the money on Deposit for the agreed-on term, institutions usually Grant higher Interest rates than they do on accounts from which money may be withdrawn on demand, although this may not be the case in an inverted Yield curve situation. Fixed rates are common, but some institutions Offer CDs with various forms of variable rates.

Posted by Institute for International Research

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