Brokered Certificate Of Deposit

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Checkable Deposits

    Any demand deposit account against which checks or drafts of ...
  3. Principal

    1. The amount borrowed or the amount still owed on a loan, separate ...
  4. Secondary Market

    A market where investors purchase securities or assets from other ...
  5. Interest

    1. The charge for the privilege of borrowing money, typically ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
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 >>
Related Articles
  1. Bonds & Fixed Income

    Certificates Of Deposit

    Safety is a hallmark of the traditional certificate of deposit (CD) sold by a bank or credit union.
  2. Investing Basics

    Callable CDs: Check The Fine Print

    These offer higher returns than regular certificates of deposit, but there's a catch.
  3. Insurance

    How To Create A Laddered CD Portfolio

    Laddered certificates of deposit offer safe capital and predictable cash flow, while bringing simplicity to your portfolio.
  4. Insurance

    Are CDs Good Protection For The Bear Market?

    Certificates of deposit promise stable income in any market, but do they deliver?
  5. Mutual Funds & ETFs

    Top 10 Investments For Baby Boomers

    Find out which investments are most likely to help you achieve your post-work income goals.
  6. Personal Finance

    Get A Short-Term Advantage In The Money Market

    This investment vehicle is often the perfect stop-gap measure for growing your money.
  7. Options & Futures

    Top 4 Strategies For Managing A Bond Portfolio

    Find out how these strategies work and how you can put them to work for you.
  8. Investing

    How to Protect IRAs from Higher Interest Rates

    Rising interest rates don’t have to translate into investment losses in an IRA. Here's how you can protect your investments.
  9. Investing Basics

    What are Cash Equivalents?

    Cash equivalents are money market instruments.
  10. Savings

    Explaining Term Deposits

    A term deposit (more often called a certificate of deposit or CD) is a deposit account that is made for a specific period of time.

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!