Is the FDIC insurance on brokered CDs?
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Hello,
I just started using Fidelity CMA. A nice substitute for normal CDs are broker-broken CDs. But I have a couple problems.
- Are they covered by the FDIC?
- How do you choose when there seem to be so many possibilities available? Are they all the same, save from interest rates and maturity dates? What about the ones that sound foreign?
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Usually brokered CDs are insured by the FDIC upto $250,000 per individual at each bank. Just make sure the insurance relates to the issuing bank rather than from any broker.
Minimum deposit, bank's reputation, interest rates, maturity dates and early withdrawal penalties you need to keep in mind while choosing the suitable CD for yourself.
You should avoid foreign broken CDs, as these are not FDIC insured, but still, if you want to take them, then carefully investigate the reputation and financial condition of that bank.