Offbeat Offerings: Brokered Certificates of Deposit

by Cara Scatizzi

Offbeat Offerings: Brokered Certificates Of Deposit Splash image

Most investors have, at one time or another, parked a sum of money in a bank certificate of deposit (CD). A typical bank CD bears a maturity date, a specified interest rate, and is insured for sums up to $100,000 if the issuing bank is insured by the Federal Deposit Insurance Corporation (FDIC).

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Traditionally, individual investors have purchased bank CDs through local banks. But in today’s market, individual investors increasingly have access to “brokered” CDs, which are CDs issued by a bank and sold through a brokerage firm. The allure of these brokered CDs is the possibility of higher rates compared to a traditional CD purchased through a local bank.

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