Summary: Today's Highest 1-Year Online CD Rates - September 2026
Bank Institution
Minimum
Interest Rate (APY)
BTG Pactual Bank
$500
4.45%
Canadian Imperial Bank USA
$1,000
4.35%
Popular Direct
$10,000
4.25%
Certificates of deposit (CD) rates from online banks are often above average if you are willing to open and manage your account using the Internet. Most online banks offer an online application and money can be transferred to fund the CD via an electronic transfer, check, wire, or credit card. You can view a financial snapshot of any online bank by clicking on its name and then the Financial Details tab.
As of September 23, 2026, the top 1-year online CD rate is 4.45% APY from BTG Pactual Bank, followed by 4.35% APY from Morgan Stanley Private Bank (Offered through ETrade) and 4.35% APY from Canadian Imperial Bank USA. In the table below, you will find a list of the highest 1-year online CD rates, ranked in
descending order by interest rate currently offered. Rates change frequently, so check back for the latest numbers.
Account was frozen (over 400K) after they confused our account with another account / person whose name was not even very similar. We were treated like dirt after 12 years and "Guilty until Innocent". I ha...
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Opened an account with Bask several years ago for all of American Airlines miles when rates were close to zero. At some point I switched to an interest bearing account and then at some point I moved to an...
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I have 5 other cd's at competing banks and have not had trouble. I tried 3 times today to open one w/ bradesco and it repeatedly declines my app after I input the code they sent me. Customer service was no...
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have had 3 cd accounts. all interactions with instructions for disposition of funds were never exactly enacted as discussed and requests for confirmatory emails never sent with details as terms discussed. ...
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I have had multiple CD's with this bank and have never had a problem. Easy account setup. Interest on CD's is transferred on time to my external checking account every month. You can call by phone or leave...
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not really an onllne bank. compare this interface that gives you no information with that of any other bank (I cannot even confirm the rate). cannot switch in and out of cds or np cds. just not an online b...
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Warning: Early Withdrawal Penalty is 270 days interest.
Neil | Dec 18, 2023
I submitted a CD application 18 months 5.50 APY over a week ago and my application was declined no reason was given, I have the funds in another bank for transfer, credit score over 800. I think the reason...
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Finworth looks legit, but their online disclosures and incomplete and you cannot reach them by phone and they don't respond to inquiries. I am moving along and you should too.
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I’ve filed a complaint with the FDIC. This bank keeps rearranging my transactions, even if they’ve posted and are not pending. They also will deny a transaction and charge a non sufficient funds fee ...
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Sallie mae is just a horrible institution. We've done business with them before and swore on the holy bible not to go near there again, but a 18 mos cd at 5.55% brought us back.
Synchrony Bank recently closed 3 of my accounts with them and this decision was completely unwarranted. I had two Guitar Center cards and one Levin Furniture card. I found out about this through a push not...
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Problem with ties to puppy mills. I closed a cct. https://www.americanbanker.com/news/tab-bank-dragged-into-seedy-world-of-puppy-mill-loans-by-fintech-partner
Barclays is the worst. Transfer speeds even worse than Synchrony now. Service is worse than anything. Save yourself the trouble of getting sucked into rates that are sometimes competitive and choose anythi...
I have read these reviews and noticed how old they are. My experience with Capital One has been very good. I have had CDs and savings accounts. All of my transactions have been on line. I have enjoyed usin...
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Been a customer for a couple of years now with interesting checking, been a happy customer. They give you a $10 reimbursement on atm fees per statement cycle. They pay you to leave your money there curre...
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Warning: Early Withdrawal Penalty is 12 Months interest.
Mike Brown | Jul 6, 2023
This is an example of a bad bank. Their online process for purchasing a CD is horrible. You fill it out and it rejects it after all of your private information is disclosed. They there customer service is ...
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And I discovered that they play bait and switch and have no problems lying. This system won't let me give it zero or negative stars so I have given it one, but that is at least one too many.
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I have been working for this company more than 5 years. I would not recommend any investment with First Citizens Bank. They are the worst performer on the market based on the customer and employee reviews...
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AVOID at all costs. We read the addendum to the final page of the LENGTHY account agreement mailed to us after completing the online portion. Guess what? It gives this sweet seeming Discover Bank access to...
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Parent seems to be owned by a large Chilean bank. Not saying this is good or bad, but it is complication, especially in the current environment.
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I filled out the application 10 days ago answering all questions and sent a file with a copy of my drivers license to Western Bank. I received an email saying that a banker would call me within one busines...
Fully functional bank account that would be great for my needs, but the quarterly interest payment thing is a real nuisance. I wish they would change it. It isn't market.
A real pain in the *** process to try and get approved! They were unable to match my drivers license photo with my live image after several times trying! Went to limelight bank instead and got approved in ...
HORRIBLE SERVICE. My son's campus checking account was hacked and over $9000 was stolen. Fraud department was impossible to reach and we waited on phone several days for over 2 hours at a time. They too...
Update: STAY AWAY FROM THIS BANK! They have no clue how to run an online bank. This bank is not ready for prime time. Nothing but problems. Customer service is dismal at best.
I took out a substantial CD with Forbright, a small bank that tries hard. At the time, it was the highest rate around. The bank officer I dealt with most, Walid, knocked himself out to be helpful and get t...
I see nothing exciting about AmEx Bank. Sign on is a hassle and the rates are adequate. Multiple accounts are not summarized. To cancel maturing CDs require phoning in or snail mail. Above average serv...
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Sophomoric as hell. I opened a LevelUp account for the 4.40% rate (now 4.20%). Rate requires automatic $250 deposit each month which I made, but I now realized that I never got that rate. Customer servic...
Warning: Early Withdrawal Penalty equals one year of interest.
JuanVelasco | Mar 17, 2023
STAY AWAY !
They closed my accounts with no warning.
After multiple successful direct deposits and mobile checks deposits, they claimed one of the three checks I deposited a few days ago was fake. No...
Early withdrawal penalty is one-fourth the amount of interest that would have been earned had CD been held to maturity.
smithy1968 | Mar 20, 2025
A non-customer-friendly organization that just switches between two contaminated brands trying to bring back some sort of goodwill that it had before it started selling fake foreign currency CDs in 2006 an...
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bad bank hold your deposit over months without credit in your account, no interest, they don’t want pay you interest , they want your money with 0% interest.
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I joined in PENFED in Spring Of 2023 after 15 yrs of belonging to one of the banking giants. I found my accounts dwindling fast unexplained decreases. I decided to close the account but had to return a mer...
Their online interface is circa 2004. They limit the number of accounts you can set up for ACH. And they sit on ACH transfers.... for days. Not sure if the good rates are worth it.
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Everyone here in Boston raves about Salem Five but it is shithole operation filled with nasty entitled people. As for this online savings product, the fees are ridiculous, the transfer charges are obnoxiou...
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I'll steer clear of Dollar Savings Direct and My Savings Direct until they guarantee users at both online divisions their best rates. Banks have the right to segment their customers yes, but these games w...
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I guess customer service is in the US (not sure). I'd rather that someone in the Philippines answered though. These people are so poorly trained and ill informed that I do not trust them with my personal...
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Agree with Jaben to stay away from docfcu. They don't appreciate loyal members and easily turn down any requests after a delayed response. I have closed my accounts and moved my funds to better institutio...
While USAA was at one point a great option for all your banking needs, the service has deteriorated so much that I'm currently in the process of changing banks after more than 2 decades. The final straw w...
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Tried to enter information on line to open a 5 year CD, multiple time and wasn't accepted. Talked to a live person who was of no help at all. My credit score is over 800 and I have plenty of money in oth...
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Echoing the other negative reviews here. Avoid because rate is bait-and-switch, website is awful and service is not acceptable (provided by offshore reps who barely speak English, raise their voice and ad...
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FREQUENTLY ASKED QUESTIONS ON CERTIFICATES OF DEPOSIT
What does APY mean?
“APY” stands for annual percentage yield. CD rates are displayed as APY to indicate the effective annual return including compounding over the course of a year. For example, $100,000 deposited at a 1.20% APY will earn $1,200 over the year. Unlike a savings or money market account, a CD’s APY is fixed for the term of the CD and will not change once the CD is opened.
What are CD rates?
CD rates are the fix rate that the bank pays a depositor for entering a CD for the entire term of a CD.
They are expressed in annual percentage yield (“APY”) terms, so that they are standardized.
$100,000 invested in a one year CD at 1% will be worth $101,000 at maturity in exactly 1 year.
$100,000 invested in a two-year CD at 1.50% will be worth $101,500 in exactly 1 year and worth
$103,022.50 at maturity (assuming the interest is not paid out before maturity, but is added to
the principal). Please see BestCashCow’s Savings & CD Calculator to better
understand the magic of compounded interest over time.
Do CDs Pay Interest Monthly or Yearly?
When opening a CD, it is important to consider how interest is credited or paid. Interest can be credited to the CD monthly, quarterly or annually. For those CDs of one year or less, interest may be credited only at maturity.
When interest is paid, the CD holder may have arranged for the interest to be mailed to them as a check. The other option is for the interest to be added to the principal of the CD.
Regardless of how and when interest is paid, it is required to be expressed (standardized) by all banks in the form of an annual percentage yield (“APY”) rate.
How Is Interest on CDs Taxed?
Interest on CDs is taxed as ordinary income. Your bank will provide you with a 1099-INT detailing the interest that you must report on your tax return at the end of each year. Regardless of whether interest is paid in the form of a check or added to principal, CD holders need to report the interest in the year in which it is paid. Purchasing a Certificate of Deposit of one-year or less that pays a single lump sum interest payment at maturity may defer tax on interest until the following year, but otherwise holders of CDs should generally expect to pay ordinary taxes on interest earned in every year in which they hold a CD. Further detail is found in IRS Publication 550 (page 5).
Why Are CD Rates So Low?
CD rates on terms of 1 and 2 years were very constantly low for many years from 2009 to 2015 as the Fed Funds
rate was held at zero following the great recession. Rates on longer term CDs were occasionally more interesting
during this period (depending more heavily on the level and direction of the US Treasury Bond).
The US Federal Reserve’s action towards normalizing interest rates has been painfully
slow (resulting from Brexit, European financial instability, etc.), and CD rates have remained
at levels that are very low by historical norms. However, we have seen CD rates rise in 2016
and 2017 as the Federal Reserve has begun to slowly raise the Fed Funds rate.
Are CD rates going up or down? When are they expected to rise?
If the Federal Reserve accelerates its plan to raise the Fed Funds rate or if global economic
developments were to cause US treasury rates to rise, we would quickly see higher CD rates.
However, the global economic environment is uncertain with European long-term interest rates being
negative. Should the US also enter a recession and the US 10-year Treasury rate fall still further,
it is possible that CD rates could fall further.
What is a good rate for a CD?
BestCashCow lists the best CD rates available from online banks above, and the best rates from
local
banks and credit unions.
A good rate is the best rate that you can find at an
FDIC or NCUA-insured institution, provided that it compensates you adequately over the
best savings rates for the liquidity that you are giving up. Only you can determine based
on your own personal circumstances whether that is a good CD rate for you.
BestCashCow’s Savings & CD Calculator can help you to understand how much more
interest a CD can generate over a savings account.
Is there an advantage to a 12-Month Certificate of Deposit over Online Savings Accounts?
At any moment in time, there is ordinarily a premium to an online 12-month CD rate over an online savings
rate. The table below demonstrates the spread between the two over the last several years.
Whether it makes sense for you to take advantage of these higher rates in the 12-month rate depends on
your own need for liquidity and your view on whether and how fast savings rates will rise.
What are the advantages of online one-year CDs?
Funds deposited in FDIC banks and within insurance limits are protected by the full faith and credit of the United States government.
CDs provide a predictable, set rate of return.
The CD can be opened from the comfort of your house.
The CDs are generally available to any resident of the United States.
What are the disadvantages of one year CDs?
One year CDs pay interest rates that are just above the leading rates offered on online and branch-based savings and money market accounts. There is a very slight premium for having the money locked up for one year. Your own circumstances and tax rate will help you to determine if that premium provides adequate compensation to you for your loss of liquidity.
The deposited money is committed for one year.
The account must be opened online and all inquiries must be conducted online or via the phone.
Depending on the bank, the opening and funding process can take several days to weeks although the bank generally locks the rate once the application has been received and approved.
All banks listed on BestCashCow are FDIC insured; BestCashCow.com strongly recommends that you stay within FDIC insurance limits and that if you are unsure of how the limits affect you, please visit the FDIC website.
Certificates of Deposit (CDs) are offered by most banks in a variety of maturity dates.
The 1-year rates in the table above are listed in descending order based on Annual Percentage Yield (“APY”) which is the rate of return that you will earn, when adjusted for compounding, over a 12 month period, and the way in which banks are required by US banking regulations to advertise their CD rates.
A certificate of deposit represents a time commitment between a depositor (someone who has money to put in the bank) and a bank.
The depositor agrees to leave a specified amount of money in the bank for a set period of time.
The bank agrees to keep the money safe and to provide a fixed rate of return.
A 1-year CD has a very brief time commitment and can also generate a rate of return above the prevailing savings rate.
Therefore, many people use 1-year CDs to slightly augment their rates of return over savings with only slightly more risk than they would have if they were entirely in savings accounts and money market accounts.
FDIC Insurance
Provided the bank is FDIC-insured and the deposit amount is within FDIC limits, the principal is also secured by an agency of the United States federal
government against loss. Further information about FDIC
insurance is found in this article
and if you have specific questions about your own circumstances you should use the FDIC’s Electronic Deposit Insurance Estimator.
CD Risk
The principal of a CD is safe and insured as long as the deposit amount is FDIC limits.
Interest that accrues and is paid or deposited to the principal also is safe as long as the total balance remains within FDIC limits.
A CD however bears two significant risks:
Liquidity risk
If you think you may need access to
your principal during the period of the time commitment for a major purchase or an unforeseen
expense, CDs are generally not a good place to store money. The terms of most CDs outline
the penalty that will be assessed in order to access your capital. This penalty is usually
assessed in terms of time periods. For example, a common penalty on a 1-year CD is 3 months,
although you should always check this carefully in the terms and conditions before opening
a CD as it could be longer. Banks and credit unions are not obliged to offer an early
withdrawal penalty, and may change or remove or even refuse to honor the early withdrawal
penalty in their paperwork. For further details, please read this
article.
BestCashCow never recommends a strategy involving the purchase of a CD when you have a high
likelihood that you will need your capital.
Inflation risk
Since CDs are considered a very safe investment when you stay within FDIC and NCUA-limits,
they often do not pay much over the anticipated rate of inflation, and can often pay under this rate.
Were interest rates to rise
(or the inflation rates to rise), the real or inflation -adjusted value of your CD can drop over time, especially when you factor
in the tax consequences of ownership of a CD. In the event of rates rising, you may be able to use the early withdrawal penalty
to get your principal but for the reasons mentioned above, BestCashCow does not recommend relying on such a strategy.
Be sure to think about how CDs fit into your overall portfolio objectives.
CD Laddering
An effective strategy used by many to bolster their savings strategy is to own CDs with various maturities.
In other words, a depositor with $400,000 and put $100,000 in a 3 month CD, $100,000 in a 6 month CD, $100,000 in a 9 month CD and $100,000 in a one-year CD, then your liquidity risk in highly diminished because you are always near maturity on one of your CDs.
(Note that no more than 2 of these CDs should be at the same bank in order to avoid exceeding FDIC limits).
The reality is that we are in a very low interest rate environment, and any CD with a maturity of less than 1 year is going to pay below, perhaps well below, the prevailing rates in the leading online savings accounts or at brick-and-mortar banks.
Therefore, the strategy outlined above would be largely absurd in the current environment.
A laddering strategy that would make more sense for the same depositor who might otherwise hold $400,000 in cash would be to put $100,000 in a one year CD every three months.
Liquidity risk in the same way is diminished as the depositor is never more than 3 months from maturity, yet the depositor is picking up some small improvement over the best savings rates than where all of his money to be in cash.
Laddering strategies can also involve longer term CDs, but one that involves terms as little as 1 year can improve on the savings rates with minimal impairment to your liquidity.
The method of distributing the interest earned on a CD varies by bank.
Some banks pay interest monthly, other semi-annually, and others at the maturity of the CD. In general, online banks pay the interest electronically either by adding it to the principal balance or with an ACH transfer back to the depositor's primary linked checking account.
Other online banks may pay via a check in the mail.
Interest Rate
Currently, the most competitive banks offer 1-year rates that are slightly above the top online savings and money market rates.
Depositors need to decide if they want the fixed rate of the CD or the flexibility of the savings account (savings accounts do not come with any term time requirements).
In a rising rate environment, it is generally better to keep money flexible and liquid and put it into either short term CDs or savings or money market accounts.
In a falling rate environment, it is generally better to lock the rate using a CD or some other fixed rate investment.
In a stable rate environment, you may be able to collect a small premium in exchange for your loss of liquidity.
Online banks generally offer CDs available to residents of any of the 50 states.
The CD must be opened online and funded either by online transfer or by mail.
Summary: Today's Highest Online CD Rates by Term - September 2026
Bank Institution
Product Term
Interest Rate (APY)
BTG Pactual Bank
1-Year
4.45% APY with
$500 minimum
Canadian Imperial Bank USA
1-Year
4.35% APY with
$1,000 minimum
Popular Direct
1-Year
4.25% APY with
$10,000 minimum
Popular Direct
3-Year
4.50% APY with
$10,000 minimum
BTG Pactual Bank
3-Year
4.47% APY with
$500 minimum
Sallie Mae Bank
3-Year
4.40% APY with
$2,500 minimum
Popular Direct
5-Year
4.50% APY with
$10,000 minimum
Sallie Mae Bank
5-Year
4.40% APY with
$2,500 minimum
Synchrony Bank
5-Year
4.35% APY with
no minimum
What to Look for in an Online CD Account:
FDIC and NCUA Insurance - In order to secure the viability of the US banking system, the Federal government provides insurance to a maximum amount
of $250,000 per individual per institution (or $500,000 for joint account holders). This insurance is provided to banks
through the FDIC and to credit unions through the NCUA.
All banks listed on BestCashCow are FDIC insured; most, but not all, credit unions listed on BestCashCow are NCUA insured.
Ordinarily, all deposits (CDs, Checking, Savings Accounts) held in the same type of ownership are added together and insured to $250,000, funds held in
different types of ownership (Individual, Joint, Trust, Retirement) may fall under separate insurance provisions. In order to determine if your financial institution
is insured and to ascertain your coverage limits, please visit - as appropriate - either FDIC.gov and use the
BankFind functionality or NCUA.gov and use the Share Insurance Toolkit.
We recommend that you deposit funds in only FDIC and NCUA insured institutions and that you do not exceed coverage limits.
Minimum Deposit - There is such competition for your money that
the best CD rates are often available for sums as little as $500.
Term and CD Rates- Three month and six month certificates of
deposit rates do not dramatically exceed those in online savings and
money market accounts, and money market funds. Moreover, investors in
states with higher state tax, such as New York and California, in an
ordinary environment (not 2011) will perform equally well in a
three-month US Treasury Bond or pre-refunded municipal bonds after they
account for the fact that interest produced on those products are tax
advantaged.
Generally, longer the CD term, the higher the CD rate. In general,
the term you choose depends on how long you want to tie up your funds
and also what you think will happen to interest rates.
Interest rates will fall. Then it is better to put
money into longer-term CDs to maintain the high rate as long as
possible.
Interest rates will rise. Put money into short term
CDs. By keeping your cash more liquid, you can re-invest it as rates go
up.
Interest rates will remain flat. In this case, going
for longer-term CDs will help you maximize your interest income.
Early Withdrawal - Any certificate of deposit will bear
substantial penalties for early withdrawal, if it is even allowed.
Ordinarily, the penalty for early withdrawal will be a loss of all of
your accrued interest, but there are certain circumstances where banks
will also assess penalties that will result in a loss of some of your
principal.
3 Simple Reasons to Never Ever Buy a Brokered Certificate of Deposit
Author:Ari Socolow
on January 17, 2024
- modified on September 11, 2026
On and off from February to May of 2023, US financial markets witnessed something that they ordinarily do not experience. We saw 1-year and 18-month brokered CDs rise to levels that were competitive with 1-year or 18-month online CDs, as some of the nation's largest banks raced to quickly fortify their balance sheets in the wake of the failures of Silicon Valley Bank, Signature Bank and Republic Bank. We have not seen that since.
For many depositors - especially moderate net worth depositors with lots of money in brokerage accounts - these products appeared compelling. These depositors can gain competitive yields from banks they recognized and that are not ordinarily rate competitive (Chase, Bank of America, Wells Fargo, Truist, etc.) up to FDIC limits without the need to open online CD accounts all over the place. Concerns over a possible Federal government default - partially from an unwillingness of the part of Congress to raise the debt ceiling - may make CDs still more attractive and accelerated customer flows from Treasurys into brokered CDs.
But, quite simply, brokered CD rates are no longer competitive with online CDs.
Some still like what they perceive to be more liquidity in brokered CDs due to the absence of early withdrawal penalties.
At the same time, many BestCashCow readers who rushed into these brokered CDs that are nearing their maturity are trying to get out of them shortly before maturity (often in order to roll into longer-dated CDs and Treasuries before rates continue to fall).
They are reporting that brokered CDs do not offer the additional liquidity that has been perceived due to the following:
1.The market to dispose of brokered CDs does not exist, or if it does, it is not accessible through the major brokers or through online brokers. Bids that are solicited are so far from the market that huge losses would be incurred if sold.
2. While these products were sold without commission, every broker in the country is going to charge a significant commission upon sale. Even online brokers that may allow you to sell other fixed income products without commissions charge at least 10 basis points on any sale of brokered CDs before maturity.
3. There are also losses if held to maturity. Brokered CDs are often structured so that maturity is on a Friday or over the weekend. Either the broker or the bank is earning interest during this period, but the customer is losing interest. In many cases, customers do not realize that the issue date was several days after their money was withdrawn from their accounts. So, the customer loses days of interest on both the purchase and the sale.
We field a lot of questions from readers about "variable CDs", "flexible rate CDs" or "indexed CDs". It seems that several banks and credit unions have been heavily promoting these products, and we have learned that they may now be appearing on the top of rate tables on some websites.
Make no mistake, a variable rate Certificate of Deposit (also perhaps called a flexible rate CD or an indexed Certificate of Deposit) is an absurd product for anyone to purchase and should be avoided at all costs.
The entire purpose of a Certificate of Deposit, versus a savings or money market account, is to lock in an interest rate over a period of time. At a time like the present where interest rates are at multi-year highs, depositors are wise to lock in some of their money at a guaranteed interest rate for 2, 3, 4 or 5 years in order to guard against the possibility that interest rates reverse course and come back down quickly. (Since Certificates of Deposit carry an early withdrawal penalty, depositors should not put money in a CD that they may need before maturity, especially since banks may have terms allowing them to refuse early withdrawals).
While the very nature of a CD is to lock in an interest rate and guard against falling rates, a variable CD is precisely designed by the issuing bank not to achieve that goal, but nonetheless to lock in the depositor.
I looked at the 3-year variable CD product being offered by Valley Bank. This product is geared to pay 0.10% APY above the current upper limit of the Fed Funds rate (currently 5.50%). If the Fed Funds rate falls, you will be earning less than the advertised rate after the next reset. Equally vulnerable is a Flex Index CD offered by Merchants Bank of Indiana which is tied to a 2.75% margin below the Prime Rate.
At the same time as we caution against variable CDs, we recognize that variable savings accounts do not bear the same risk. Ivy Bank, for example, offers an Indexed Savings account that resets monthly based on the 1-Month US Treasury rate and that currently yields 5.66% APY. Savings accounts like Ivy Bank's offer depositors the advantage of higher savings rates, but depositors aren not locked into a long-term CD with the prospect of lower rates should the index fall.
Bottom line: We do not list variable rate, indexed rate or flexible rate CDs on BestCashCow, and we strongly encourage depositors to consider fully the risks of these products before investing in them.
Buying Brokered CDs from Banks on the Brink Seems Like a Bad Strategy
Author:Ari Socolow
on March 18, 2023
- modified on September 10, 2026
Those owning full-service brokerage accounts at institutions like Morgan Stanley have probably received calls this week from their brokers. In addition to calming you down about the crisis around the banks, many of these brokers’ calls are designed to pitch you on brokered CDs with attractive 1 year (or longer) rates. Those with online brokerage accounts can also see brokered CDs offerings through the interface.
The problem with many of these brokered CDs is that they are being issued by banks that you had not heard of before the collapse of Silicon Valley Bank and Signature Bank. Your only familiarity with these banks may come from their names crossing the CNBC tickertape every three minutes showing that the stocks are down something like 15 to 20% in the day.
Even if you are staying within FDIC limits, buying these brokered CDs is not a no-brainer. It is actually a fairly risky proposition.
A savings account or CD opened directly with a bank is insured to FDIC limits and your funds are made available the following day by the FDIC after a bank closure or sale.
A brokered CD, unlike an account opened directly with a bank, is ordinarily not held directly in your name. It can take weeks or even months for the FDIC to review the brokerage ledgers and make you whole up to FDIC limits. In the event of a bank failure, you are not only not getting the high interest rate you had been offered but you are losing the time value of money just waiting to recover your principal.
Even in the event that a failed bank is acquired in a transaction arranged by the FDIC, the acquiring bank may chose not to assume brokered CDs.
It all seems especially silly to chase brokered CDs from distressed institutions when you realize that you can lock in great CDs directly from banks that are not distressed today, where you are more likely to get the rate for the full term and where you also get your funds up to FDIC limits the next day in the unlikely event of a failure.
Direct bank CDs also offer clear and transparent early withdrawal terms (versus brokered CDs where you need to sell to the market if you need your money before maturity).
BestCashCow is the most comprehensive bank rate site on the Internet. Since 2005, we have monitored savings account, money market account and Certificate of Deposit rates from over 8,000 banks and 7,700 credit unions to find and display the best offers for those looking to earn and save more. You can learn more about the company here.
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