First off, bank CDs are often purchased directly from a bank, while brokered CDs are typically purchased through a brokerage. They can be broken down into five categories: transaction, selection, costs, potential benefits, and risk. So before you traipse down to the bank and invest in a plain-vanilla CD, you might want to learn the differences between bank CDs and brokered CDs. CDs can offer a calm respite for investors who want to safely park their money, allow it to generate a bit of income, and walk away, knowing that the invested funds are generally protected by the FDIC up to $250,000.īut did you know there’s an alternative to the bank CD? The brokered CD can offer wider selection, potentially higher yields, and the same FDIC protection. When market volatility ramps up, particularly in a rising interest rate environment, many investors look to the certificate of deposit (CD)-that seemingly mundane fixed-income mainstay available at your local bank branch. Most brokered CDs offer FDIC protection up to $250,000, but it’s important to check before you investīrokered CDs can be purchased and sold on the secondary market and are subject to the same market forces as other fixed-income products

Brokered CDs can offer a wider selection and potentially higher yields than CDs purchased directly from a bank.

Typical cd interest rate