Held through a brokerage account
A bank issues the CD, but you buy it and hold it inside a brokerage account. Your day-to-day relationship is with the brokerage — it shows the CD on your statements and pays interest into your account — while the issuing bank sets the CD’s terms.
Callable vs. non-callable
A non-callable CD can’t be redeemed early by the issuing bank, so you know its maturity date when you buy. A callable CD gives the bank the right to end it on certain dates, which it is most likely to do when rates have fallen. Callable CDs sometimes pay more to compensate. Check the call schedule on the order screen.
Built to be held to maturity
Brokered CDs are designed to be kept until they mature. If you need the money earlier, you’ll have to sell on the secondary market, where the price depends on current rates and demand. When rates have risen, you may receive less than you paid. If there’s a chance you’ll need the money sooner, make sure the term fits your timeline before buying.
Deposit insurance has limits
Qualifying brokered CDs are eligible for FDIC coverage of the issuing bank, up to $250,000 per depositor per bank per ownership category, combined with any other deposits you hold at that bank. Coverage depends on proper recordkeeping by the brokerage. Market losses from selling early are not insured. See our insurance guide.
Interest and pricing
Most brokered CDs pay simple interest on a schedule — monthly, quarterly, semiannually or at maturity — rather than compounding. New-issue CDs typically carry no commission because the issuer pays the brokerage; secondary-market trades may involve fees or markups.
Terms come from the issuer
The issuing bank sets the rate, minimum, payment schedule and other terms. The offering documents and trade confirmation are the controlling sources, so read them closely before you buy. This article is general education, not financial advice; CompareCDRate.com doesn’t issue CDs, open accounts, or hold money.