Higher returns come with risks, but here’s what you need to know

  • Brokered CDs often have higher returns
  • Brokered CDs may have additional fees and downsides
  • Understanding how brokered CDs work is important
  • Read the terms and conditions carefully before purchasing a CD
  • Make sure your CD is insured
  • Buy from a reputable broker

Factuality Level: 7
Justification: The article provides information about brokered CDs and highlights the potential benefits and downsides. It includes quotes from professionals and offers advice on understanding the terms, finding a reputable broker, and ensuring the CD is insured. The information provided seems accurate and objective, without any obvious bias or misleading information. However, it could benefit from more in-depth analysis and examples to support the claims made.

Noise Level: 7
Justification: The article provides information on brokered CDs and their potential benefits and downsides. It advises readers to thoroughly understand the terms and conditions, including fees and penalties, before investing in a brokered CD. It also emphasizes the importance of working with a trusted financial adviser and checking the background of the brokerage. However, the article lacks scientific rigor and intellectual honesty as it does not provide any data or evidence to support its claims. It also does not provide actionable insights or solutions for readers.

Financial Relevance: Yes
Financial Markets Impacted: The article provides information on brokered CDs and their potential benefits and downsides. It mentions specific financial institutions like Vanguard and Charles Schwab that offer brokered CDs with higher yields. This information may be of interest to investors and could impact the financial markets.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article does not mention any extreme events or their impacts.

Public Companies: Vanguard (), Charles Schwab ()
Private Companies: California Bank and Trust
Key People: Ben Alvarado (Executive Vice President and Director of Core Banking at California Bank and Trust), Steve Azoury (Chartered Financial Consultant and Owner of Azoury Financial)

CD rates are soaring, with some reaching upwards of 5%. While many investors choose to purchase a certificate of deposit directly from their bank, brokered CDs offer higher yields due to the competitive market. However, it’s important to understand the risks and fees associated with brokered CDs. Unlike bank CDs, early withdrawal from a brokered CD requires selling it, which may incur sales fees. Additionally, brokered CDs are subject to interest rate risk and can be withdrawn by the issuing institution. It’s crucial to read the terms and conditions carefully, including any additional fees or penalties. Ensure that your CD is insured and buy from a reputable broker. By following these guidelines, you can maximize your CD returns while minimizing potential risks.