Why choose a brokered CD?

As the term suggests, brokered CD’s are bought from brokers. With a brokered CD, your broker will stand like a financial adviser for you trying to look for the best rates and the best place to acquire a CD. Just all the other types of certificate of deposits, an investor or a depositor will have to ‘keep’ or invest his money in a bank, a credit union or a financial institution for a certain range of time. The period when the money is kept into your investment is called the maturity date. In return with your willingness to entrust your money with them, you are paid a certain amount of cash depending on the interest rates that two parties have both agreed upon.

As stated earlier, the brokered CD is pretty much like the other CD’s but with a slight modification. When you opt to buy a CD, you can do it by acquiring it with the bank of your choice but you can only open one which it offers. With a brokered CD, you actually can acquire them from different places with several options as well. An investor is found on the advantageous side provided he finds a bank or a credit union with low reasonable rates.

A brokered CD can also be compared to different types of fixed-income ventures or investments. You also have the option to buy and sell such CD. While it is true that you can buy and sell this CD, there is a limitation in the supply. The size order is only limited to $10,000.

Any type of investment; large or small always comes with the risk. The seen disadvantage in brokered CD is that you may be selling it to a secondary market which is way lower with the price that you bought it. Without the right knowledge in handling this type of CD then you might in the end lose al your money. If you wish to understand more on how this type of CD really works then ask an expert; a financial planner or a financial consultant. Go for banks and financial institutions which are FDIC accredited to ensure the safety of your investment. You might get too overwhelmed when you are offered a CD with high rates. This too would mean that you are exposing your money to higher risk.

Be vigilant and you’ll always have tour money in good hands.