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A face-amount certificate (FAC) is a contract between an investor and an issuer in which the issuer guarantees payment of a stated (face amount) sum to the investor at some set date in the future. In return for this future payment, the investor agrees to pay the issuer a set amount of money either
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Issuers of these investments are face-amount certificate companies. Very few face-amount certificate companies operate today because tax law changes have eliminated their tax advantages. The most notable financial services companies in the face-amount certificate business today are
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as a lump sum or in periodic installments. If the investor pays for the certificate in a lump sum, the investment is known as a fully paid face amount certificate.
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Along with FAC, other company types that fall under the scope of the
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