CDIPs pay a stated fixed rate of interest like a traditional CD, however, interest is paid semi-annually on an inflation-adjusted amount, not the original deposit amount.
With CDIPs, LaSalle becomes the first company to offer individual investors an inflation- protected certificate of deposit, where the investor earns a rate of return equal to the inflation rate plus a stated coupon.
Treasury Inflation-Protected Securities (TIPS), CDIPs use the non-seasonally adjusted Consumer Price Index as a reference to measure inflation.
So, for those investors who rely on the stability and predictability of fixed-income investing, have an asset allocation strategy and who look to hedge against inflation with a real (as opposed to nominal) rate of return on their investments, CDIPs should be an important investment consideration.
A valuable feature of CDIPs is the survivor's option, designed to protect estate assets.