What are Variable Rate Demand Notes?
A debt instrument which can be payable to the creditor on demand. This note can accrue interest relative to the prevailing market rate. Therefore, the interest rate of the variable rate demand note changes over time. Once the creditor requests for repayment, the amount is expected to be paid in its entirety immediately . Variable rate demand notes are traded at a very slight premium to tax-free auction rate securities.
MortgageRates :: Jan.30.2008 :: Mortgage Rates :: No Comments »