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The most popular type of certificate of deposit, or CD, is the traditional CD. But there are a growing number of financial institutions that are offering new forms of CDs that have increased flexibility, for both the investor and the institution. If t

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

he traditional CD has always seemed to rule-bound for you, you may want to sacrifice some yield for more flexible options.

The Traditional CD

With a traditional CD, you deposit a fixed amount of money for a certain time period and, in return, you re

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ceive a pre-set interest rate. At the end of the time period, or term, you can either cash out the CD or roll it over for another term. Most banks will allow you to add additional money during the term or when you roll the CD over. If you withdraw the

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

money before the end of the term you will be subject to stiff penalties that will result in the loss of interest and even principal. There are federal regulations that control the minimum early withdrawal penalty - there is no maximum penalty regulat

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

on. Institutions must disclose all penalties and terms when the account is opened.

The Bump-up CD

If you are worried that rates are on the rise, and you don't want to commit your money too soon, a bump-up CD may be right for you. This allows you to

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

take advantage of rising rates. For example, you buy a two-year CD at a set rate, and six months into the term the bank offers an additional 0.25% on two year CDs. A bump-up CD is designed to give you the option of telling the bank that you want to "b

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

ump up" to that new rate. You will usually be allowed to do this once a term.

The disadvantage is that you will usually have a lower initial rate than on a traditional two-year CD. If rates take a long time to rise, you won't make up for the earli

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

er, lower-rate portion of the term unless the rates go quite high. Be sure that you understand where rates are expected to go before you buy a bump-up CD.

The Liquid CD

Want a CD with the convenience of a savings account? The liquid CD offers consum

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

rs the opportunity to withdraw money from the CD without penalties. There may be minimum balance requirements on the account. The interest rate will usually be higher than the rate on a money market rate, but less than a traditional CD of the same ter

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

m and minimum.

Federal regulations state that no money can be withdrawn without penalty until the money has been in the account for seven days. After that the first-penalty withdrawal can occur anytime according to the banks terms. Make sure that you

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

have and idea how long after opening the account you will need to make a withdrawal. There may also be limitations placed on the number of withdrawals per term. You will have to decide if the convenience of liquidity is a greater advantage than tra

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ditional CDs.

The Zero-coupon CD

The zero-coupon CD works the same way as a zero-coupon bond, there are no interest payments. You buy the CD at a deep discount to the par value - the amount you receive when the CD matures.

With a zero-coupon CD, yo

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

buy a $100,000 CD with a 10 year term at a 7% interest rate for $50,000. During the 10 year term, you will not receive any interest payments. The money is being invested. You will not be able to receive any income off of the CD each year, but you wil

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

l be taxed on it. The first year you will owe taxes on the $3500 that you haven't even received yet. Each year you'll have a bigger tax bill. You have to know in advance that you have enough money to pay the taxes on this CD.

Callable CDs

If a CD is

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

issued on a callable basis, the bank has the authority to "call" on it after the pre-set call-protection expires, but before the actual CD maturity date. For example, if you buy a 5 year CD with a 6 month call protection period, the bank can call the

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

CD back if rates fall after the first six months.

This is the bank's way of protecting themselves from having to pay out a higher interest than the going rate. If they issue a CD at 4 percent and six month later, the rates drop to 4% on 5 year CDs,

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

he bank will call the CD. You receive your full principal back and any interest earned to date. The bank will usually pay a quarter to half a percent more on callable CDs than traditional CDs, because you are assuming the interest risk.

Brokerage CDs

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

Brokerage CDs are sold through a brokerage. Banks often use brokers as sales representatives to locate investors who want to purchase CDs. Brokered CDs are more competitive and will often pay higher rates than CDs from your local bank. These CDs can

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

be traded like bonds on the secondary market, but there is no guarantee that you won't take a loss in trading. The only way to be sure that you will receive your full principal and interest is to hold the CD until it matures. Most brokered CD have ca

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ll options included and are backed by the FDIC.

High-yield CDs

Banks are competitive when it comes to selling CDs. They will offer better than average rates just to secure your money. Look at the top 100 highest yield CDs for the best possible rates

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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