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What are risks of an MLCD?

MLCDs may not be a suitable investment for all investors. Please note the following selected risks. For full details, please read the applicable offering document of any investments you choose to make.

  • Liquidity Risk. MLCDs do not trade on exchanges, are thinly traded, and can be difficult to price. Due to limited liquidity, the market price of an MLCD may be significantly discounted if redeemed or sold prior to maturity. MLCDs should be considered a buy-and-hold investment. Consider carefully before purchasing an MLCD if you may not be able to hold the MLCD until maturity.
  • Market Risk. The price of an MLCD during its term and at maturity can be affected by many factors including volatility, interest rates and other market forces. These may impact the return of the MLCD. Past performance of the underlier is no guarantee of future performance.
  • Credit Risk. MLCDs bought in excess of the FDIC insurance limits are subject to the credit risk of the issuing bank. You should be aware that only the amount you initially invested in the MLCD will be insured up to FDIC coverage limits.
  • Performance Risk. The return of the MLCD depends on the performance of the underlier and is not guaranteed. The return of the MLCD may be different than the return of the underlier’s performance. Reasons for the difference may be subject to terms of the MLCD or market conditions.
  • Statement Pricing. Statement pricing may be less than the original amount invested and is subject to market conditions.