Brokered Certificate Of Deposit

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DEFINITION of 'Brokered Certificate Of Deposit'

A certificate of deposit (CD) that is purchased through a brokerage firm, or from a sales representative other than a bank. The bank is still the initiator of the CD, but has outsourced to firms that strive to locate potential investors. A higher price is generally paid for these types of CDs, as they are in a more competitive market.

BREAKING DOWN 'Brokered Certificate Of Deposit'

As with all CDs, if held to maturity, the holder with receive the full principal with interest. However, if desired, brokered CDs can be traded with the risk of a loss on the investment.

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RELATED FAQS
  1. What is the difference between a demand deposit and a term deposit?

    Demand deposits and term deposits differ in terms of accessibility or liquidity, and in the amount of interest that can be ... Read Full Answer >>
  2. Other than my savings account, what other types of holdings compound my interest?

    Investors and savers can use the power of compounding interest to accumulate wealth over time. Unlike simple interest that ... Read Full Answer >>
  3. How often is interest compounded?

    Interest can be compounded on any given frequency schedule. Common interest compounding time frames are daily, monthly, semi-annually ... Read Full Answer >>
  4. What is a risk pyramid and why is it important?

    A risk pyramid, also known as an investment pyramid, is a strategy an investor uses to determine how to invest his money. ... Read Full Answer >>
  5. What are some safe fixed-income investments?

    For the majority of younger investors, taking on risk within a portfolio in return for higher returns is the norm. Because ... Read Full Answer >>
  6. How do commercial banks make money?

    Commercial banks make money by providing loans and earning interest income from those loans. Customer deposits, such as checking ... Read Full Answer >>

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