What are Brokered CDs? This is a question many investors are asking in their quest to obtain the maximum amount of earnings through this conservative type of investment. As the name suggests, a brokered CD is purchased through a broker or third party other than a bank or credit union.
With a typical CD that is purchased through a financial institution, the stated CD rates for that establishment are all that is available at that place of business. With a brokered CD, the investor has a variety of choices from many different financial institutions that your broker is currently handling. Unlike bank issued CDs, the brokered CD can be bought and sold on a secondary market before their maturity term has expired.
The CDs purchased through a broker do allow for a wider variety, but as an individual you can go to these financial institutions and make the same purchase without having to pay the broker’s fee. This is now possible through the online websites of most financial institutions.
The ideal situation is when a broker has negotiated a better than advertised rate with a financial institution that includes a large sum of money for an extended period of time. They then break this CD into smaller CDs and sell them to numerous investors. If these brokered CDs need to be sold before their maturity dates, this is done on the secondary market where the value is generally lower than the face value.
If you decide to purchase a brokered CD, have your broker give you examples of CDs on this secondary market for the best possible deal. Also, look into the rating of the financial institution that is issuing the CD. If the establishment has a rating below 4 stars, selling the CD will be at a discount because of the conceived higher risk.
What are brokered CDs is that they are another mechanism for investment by individuals and businesses to earn a profit. Before placing a deposit in one, please read all the fine print and know the reputation of the broker. This could save you from losing part of your principal.
To know more about the Citibank CD Rates, best cd rates USA,Best CD Rates, PNC CD Rates, highest cd rates, Chase CD Rates, you must visit - http://hsbccdrates.wordpress.com/
Showing posts with label best bank rates. Show all posts
Showing posts with label best bank rates. Show all posts
Wednesday, February 2, 2011
Thursday, January 27, 2011
The failure to research CD rates can cost you a fortune since most that invest casually do rarely obtain the best possible deal with this type of investment. Being a serious investor is hard work that takes dedication to achieve your goals.
Researching the best possible CD rates is not as hard as it may seem. One thing you should avoid is going to a branch office and asking about their CDs in person. This is the slowest and most inefficient way of proceeding with this conservative investment. Most financial institutions that have decent to great rates advertise them on the internet. If a bank does not and suggest you travel to their branch office, odds are that their CD rates are not attractive and they hope to get you into their office where comparing to other financial institutions is no longer available to you.
Remember, knowledge is power so never allow any institution to limit your resources. The use of the telephone or internet is the fastest, easiest, and most cost effective way of obtaining the knowledge on who has the best CD rates in your area.
As a simple example, Chase Manhattan Bank is a nationwide institution with a very good reputation. Their current CD rate on a 1 year CD is .025% APY. Another nationwide bank is ING that currently has a 1 year CD earning an APY of 1.00%. Then, there is Ally Bank with a 1 year CD that is earning an APY of 1.29% APY. By just comparing these three financial institutions, you can see the difference of over 4 times the amount of interest you can accrue from the lowest to the highest.
This is just one example of how your failure to research CD rates can cost you a fortune. Many financial institutions are in business to make the largest profit for them while giving out the lowest possible returns so they make money, not you.
We strive to bring you the latest and most accurate data possible from the home sites of the financial institutions we name. Always remember, the bigger the risk, the larger the reward or loss. Invest with caution.
To know more about the Citibank CD Rates, Best CD Rates, PNC CD Rates, highest cd rates, Chase CD Rates, you must visit - http://bestcdrates.blog.com/
Researching the best possible CD rates is not as hard as it may seem. One thing you should avoid is going to a branch office and asking about their CDs in person. This is the slowest and most inefficient way of proceeding with this conservative investment. Most financial institutions that have decent to great rates advertise them on the internet. If a bank does not and suggest you travel to their branch office, odds are that their CD rates are not attractive and they hope to get you into their office where comparing to other financial institutions is no longer available to you.
Remember, knowledge is power so never allow any institution to limit your resources. The use of the telephone or internet is the fastest, easiest, and most cost effective way of obtaining the knowledge on who has the best CD rates in your area.
As a simple example, Chase Manhattan Bank is a nationwide institution with a very good reputation. Their current CD rate on a 1 year CD is .025% APY. Another nationwide bank is ING that currently has a 1 year CD earning an APY of 1.00%. Then, there is Ally Bank with a 1 year CD that is earning an APY of 1.29% APY. By just comparing these three financial institutions, you can see the difference of over 4 times the amount of interest you can accrue from the lowest to the highest.
This is just one example of how your failure to research CD rates can cost you a fortune. Many financial institutions are in business to make the largest profit for them while giving out the lowest possible returns so they make money, not you.
We strive to bring you the latest and most accurate data possible from the home sites of the financial institutions we name. Always remember, the bigger the risk, the larger the reward or loss. Invest with caution.
To know more about the Citibank CD Rates, Best CD Rates, PNC CD Rates, highest cd rates, Chase CD Rates, you must visit - http://bestcdrates.blog.com/
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