Avoid Fraudulent Websites Purporting to Offer Better Rates through Brokered CDs

Rate information contained on this page may have changed. Please find latest cd rates.

Brokered CDs pay well below the best online CD rates and have ever since the advent of online banking. Do not be fooled. Any website or individual claiming that they can get you a better rate than the best available rate online is more likely than not an out-and-out fraud.

A close friend of mine who is an expert on financial fraud once explained to me that fraud is most prevalent not when times are especially good or bad, but when large parts of the population are anxiously looking for even just slightly better financial performance than the norm. While savings and CD rates have been held at extreme lows for an unprecedented time due to the Federal Reserve’s intervention, we are now beginning to see some slightly more interesting CD rates. However, people’s frustration over earning so little on their cash and their anxiety to earn more may now be opening the door to web fraud in the certificate of deposit space.

In fact, as CD rates start to head up, there is at least one website that is buying Google Adwords related to “Best Cash Cow” and “Bank rate” and claiming to be offering better rates on CDs than those found on BestCashCow.com.

The website, whose name I will not list here because of the risk of inadvertently providing it with a valuable link, lists an office address on Wilshire Boulevard in Beverly Hills, an 800 phone number and a series of CD rates for 1, 2, 3 and 5 year CD products all of which are better than the best prevailing rates. For example, the site claims to be offering a 5 year CD at 3.09%, while the best rate is currently 2.30%.

The website also misspells several key terms and seems to be written by a non-English speaker, containing numeric and financial terms that make no sense to an American. Nonetheless, some may be frustrated enough or fooled enough to call.

Out of curiosity, I called the 800 number and was transferred to a man who was clearly an American (although given the quality of the phone call, I believe that he was in China or Thailand) who claimed that he could offer these rates on FDIC-insured CDs from banks like Barclays, GE and East West Bank because they are brokered CDs.

To be clear, brokered CDs are a real financial product, ordinarily offered through major investment banks and some online brokerages (such as TD Ameritrade and Fidelity). These products offer account holders at those institutions the opportunity to divide up their money among FDIC insured banks within the umbrella of their investment banking or online banking accounts. In 2008 and 2009, a safe strategy executed quickly by many was to move any free cash from an investment bank’s money market account into short term brokered CDs.

Brokered CDs, however, have never offered rates at or above the levels of the most competitive online banks. In fact, the rates are always much lower.

The fellow attempting to sell fake brokered CDs through his website – who incidentally would not provide his name by phone and was disappointed to learn that I was in my 40s and not a senior – claimed that the FDIC would have shut down his website if the rates were not real. Unfortunately, the FDIC only monitors its member institutions, and while fraudulent financial websites may fall within the SEC or the Justice Department’s purview, one need only watch CNBC’s American Greed to know that the government simply cannot stamp out financial fraud.

In fact, nobody can control what happens on the internet and a fraudster can have a pretty good year if he can just trick one person (maybe one senior) into wiring him $250,000 for a brokered CD that doesn't exist.

The best that you can do is to avoid being the one who is tricked, and purchase CDs only directly from real banks, online and in branches, having verified their rates on BestCashCow.com.

See all of the best 5 year CD rates here.

Bottom line: With certificates of deposit, too good to be true is too good to be true.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to bank transparency and the climate crisis. Since co-founding BestCashCow in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

Today's Highest Online CD Rates

Bank Product Term Interest Rate (APY)
Charles Schwab Bank, SSB 1-Year 5.40% APY with $1,000 minimum
Finworth, a division of InsBank 1-Year 5.38% APY with $50,000 minimum
TotalDirect, a division of City National Bank of Florida 1-Year 5.35% APY with $25,000 minimum
Dollar Savings Direct, a division of Emigrant Bank 3-Year 5.00% APY with $1,000 minimum
M.Y. Safra Bank 3-Year 4.70% APY with $500 minimum
First Internet Bank of Indiana 3-Year 4.66% APY with $1,000 minimum
First Internet Bank of Indiana 5-Year 4.55% APY with $1,000 minimum
BMO Alto, a division of Bank of Montreal Harris 5-Year 4.50% APY with no minimum
Department of Commerce 5-Year 4.34% APY with $500 minimum

See More Online CD Rates →


  • Shorebreak

    May 14, 2014

    "lists an office address on Wilshire Boulevard in Beverly Hills"

    I researched this months ago and could not find such a company listed as a tenant in the building listed as the address. It's all a fraud IMHO.

  • djembebeater

    April 23, 2018

    This is certainly true historically, but as a Financial Advisor with one of the top 5 brokerage houses in the US, I am daily shocked by the latest rates available for brokered CD's in our inventory this year. Here are our rates vs. the rates listed on this site as of April 23, 2018.
    Time Best rate on this site In our inventory currently
    3 mo. 1.55 1.65
    6 mo. 1.95 1.90
    1 yr. 2.20 2.10
    5 yr. 2.90 3.15
    I'm purposely not listing the firm I work for because I'm not trying to sell anything. Just letting you know your claim that brokered CD rates are "always much lower," is no longer accurate in the current rising rate financial environment.

  • Ari Socolow

    April 26, 2018

    @djembebeater I strongly disagree. Brokered CD rates are still lower that the best rates you will find when you also look at local bank rates and credit union rates. Brokered CDs should be avoided at all costs for the reasons because they offer less liquidity. I have written the following in response to your comment here: https://www.bestcashcow.com/the-10-year-crosses-3---as-public-interest-in-cds-increases-avoid-brokered-cds.html

  • «
  • Page 1 of 1
  • »
Add your Comment

or use your BestCashCow account