These financial instruments offer a secure way to grow your money, but they differ in several. And unlike a bank cd, a brokered cd can also be traded on the secondary market Brokered cds generally pay a higher yield than direct bank issued cds
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If you want out of a brokered cd before maturity you have to sell it on the secondary market at the broker for whatever the market rate is at that time.
Brokered cds, and examine their various features so you can make an informed decision about which option provides your portfolio with optimal returns
For many consumers, especially those looking to invest in products similar to securities without running the risk of investing in financial products that aren’t insured by the fdic, brokered cds can be a great alternative to traditional cds issued directly by a bank. Brokered cds are originally issued by a bank or credit union and then purchased through a brokerage firm or broker They offer higher rates and more flexibility compared to traditional cds However, brokered cds also come with some risks to understand and minimize before you decide to add them to your retirement investment plan.
A brokered cd is a cd purchased from a brokerage or investment firm rather than a bank or credit union. Cds are backed by fdic insurance up to $250,000 per bank per depositor, principal and interest The two are similar but have some important differences You can purchase multiple cds from different banks while still holding them in the same account type to protect more than $250,000.
Brokered cds and bank cds have some stark differences — including how you earn money — so make sure you understand how they work before purchasing
What is a brokered cd? However, the main differences are that brokered cds are offered by issuing banks, and they can be purchased through multiple brokers
