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What
are brokerage CDs?
 A
brokerage CD is a certificate of deposit sold for the bank by a broker. Some
banks use brokers as sales representatives to find investors willing to purchase
CDs from their banks.
Brokered CDs often have higher rates
than CDs from your local bank, because banks using brokered CDs compete in a national
marketplace. But the value of the CD will also fluctuate with changing interest
rates. Your money is FDIC insured, and you'll get your principal back when
the CD matures, but that doesn't mean that the price of the brokered CD can't
fluctuate over the holding period. |
