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FDIC Consumer News
Special 10th Anniversary Edition - Fall 2003
Extra Tip on... Buying a Bank CD from a Broker
Brokers sometimes can negotiate a higher interest rate on bank-issued certificates of deposit, and these can be good investments. However, broker-sold CDs can be complex and may carry more risks than CDs sold directly by banks. Examples: Your ability to lock in a good interest rate for a long time is restricted if the bank can "call" (redeem) the broker-sold CD early. Also, if you need to withdraw the CD prematurely, under some circumstances, the broker might sell your CD at a loss. Excerpted from "Should You Buy a Bank CD from a Broker?," Fall 2000.
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