System and method facilitating competitive advantage in issuing financial paper

摘要

Financial instruments, particularly time certificates of deposit issued primarily by banks in the form of a contract between the depositor and the financial depository to typically pay an fixed interest rate for a fixed period of time at which redemption may occur. In the U.S. these contracts are required by Truth in Savings Regulation DD to state at the time of account opening the penalty for early withdrawal. These penalties can not be revised by the depository prior to maturity. The penalty for early withdrawal is the deterrent to allowing depositors to take advantage of subsequent enhanced investment opportunities during the term of the instrument. The withdrawal penalty is usually stated as a number of days/months of lost interest. In certain interest rate environments, this penalty may be Insufficient to discourage depositors from redeeming their deposit despite the penalty. At present, if a depositor does redeem, they must purchase a new CD for a fixed term which will tend to lengthen the term of deposit. The present invention overcomes this handicap by formulating a shorter term CD to make up the remainder of the term of the original CD.