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Written by

Brian McKay

| Fact checked | Published January 24, 2023 | Updated September 29, 2026 | 7 min read

Is a Brokered CD the Right Investment?

A brokered CD is a certificate of deposit issued by a bank but bought through a brokerage account. It is FDIC insured up to $250,000 per issuing bank and pays a fixed rate like a bank CD, but instead of paying an early withdrawal penalty you sell it on a secondary market, where the price can be below what you paid. Many brokered CDs are also callable, which lets the bank end them early. For comparison, 12 month bank CD rates average 2.94% APY, verified by MonitorBankRates as of October 13, 2026.

Brokered CDs look a lot like the CDs you open at a bank: a fixed rate, a set term and FDIC insurance. The differences show up in how you buy them, how interest is paid, and what happens if you need your money before the CD matures.

This guide explains how brokered CDs work, how they compare with bank and credit union CDs, and which savers they fit best.

12 month CD

2.94%

avg APY

24 month CD

2.83%

avg APY

36 month CD

2.75%

avg APY

60 month CD

2.84%

avg APY

MonitorBankRates national averages for bank and credit union CDs as of October 13, 2026, computed from rates published by more than 8,000 banks and credit unions.

Key facts

Where to buy: a brokerage account, not the issuing bank
Insurance: FDIC up to $250,000 per depositor, per issuing bank
Early exit: sell on the secondary market at the current market price
Watch for: call features and simple interest paid out instead of compounded

How Brokered CDs Work

Banks use brokerage firms to raise deposits from investors nationwide. The bank issues the CD, and the brokerage lists it on its platform alongside CDs from many other banks. You buy it with cash in your brokerage account, usually in $1,000 increments.

Because brokerages list CDs from many issuers, you can compare rates, terms and call features in one place and spread money across several banks without opening an account at each one. Rates on brokered CDs can be higher than a bank’s own branch rates, but they are not always higher than the best rates at online banks and credit unions, so compare both before you buy.

Interest works differently too. Most brokered CDs pay simple interest on a schedule, such as monthly, semiannually or at maturity, into your brokerage cash balance. Most bank CDs compound interest inside the CD. When you compare a brokered CD’s rate with a bank CD’s APY, keep that difference in mind.

Brokered CDs vs. Bank and Credit Union CDs

Feature	Brokered CD	Bank or credit union CD
Where to buy	Brokerage account	Directly from the bank or credit union
Insurance	FDIC up to $250,000 per issuing bank	FDIC (banks) or NCUA (credit unions) up to $250,000
Interest	Usually simple interest paid out	Usually compounds inside the CD
Early exit	Sell at market price, which can be below face value	Fixed penalty, principal returned
Call features	Common	Uncommon on standard CDs
Spreading money across banks	Easy in one account	Requires an account at each institution
Minimum deposit	Usually $1,000	Varies, often $0 to $2,500

Benefits of Brokered CDs

One account, many issuing banks

Savers with more than $250,000 in CDs can keep every dollar insured by buying CDs from several issuing banks through one brokerage account, instead of opening and tracking accounts at each bank.

A way out without a bank penalty

You can sell a brokered CD before maturity instead of paying an early withdrawal penalty. If rates have fallen since you bought it, your CD may sell for more than face value. If rates have risen, it will sell for less.

Easy to build a ladder

Brokerages list many terms and maturity dates, which makes it simple to set up a CD ladder with one CD coming due each year.

Risks to Understand Before You Buy

You can lose principal if you sell early

The secondary market price depends on current rates. If rates rise after you buy, a buyer will pay less than face value for your lower rate CD, and brokerages may also charge a markdown on the sale. A bank CD returns your full principal minus a set interest penalty; a brokered CD sold early has no such floor. Buy brokered CDs with money you expect to leave in place until maturity.

Call risk

A callable CD lets the issuing bank end it early, usually after a call protection period. Banks tend to call CDs when rates have fallen, so you get your money back just when new CDs pay less. A 5 year callable CD may only guarantee its rate until the first call date. Before buying, check:

Whether the CD is callable or non callable
The first date the bank can call it
How often the bank can call it after that date

FDIC limits are per issuing bank

Coverage follows the bank that issued the CD, not the brokerage. If you hold $200,000 in brokered CDs from one bank and another $100,000 in a CD you opened directly at that same bank, $50,000 is over the limit. Check the issuing bank on every brokered CD and add up your total deposits at each one.

The secondary market can be thin

Brokered CDs do not trade as easily as stocks. During market stress, a buyer may offer a low price or none at all. If you may need the money before the term ends, a bank CD with a known penalty or a savings account is more predictable.

Read the terms, not just the rate: The rate shown on a brokerage screen is only one part of the offer. Check the call schedule, how often interest is paid, the issuing bank, and the maturity date before you place an order.

Who Should Consider a Brokered CD?

Good fit

You already have a brokerage account and want your savings in one place
You have more than $250,000 to keep insured across several banks
You plan to hold each CD until it matures
You are comfortable reading call terms and choosing non callable CDs

Poor fit

You may need the money before maturity
You want your full principal back no matter when you exit
You want interest to compound inside the CD
You prefer a simple product with no call features

Before you buy, compare the brokered CD’s rate with the best non callable CDs at banks and credit unions. Our CD rate tables list rates from more than 8,000 banks and credit unions, and the CD calculator shows what a deposit earns at any rate and term.

Compare CD Rates

See today’s best CD rates at banks and credit unions before you buy a brokered CD.

All CD Rates CD Calculator

Frequently Asked Questions

What is a brokered CD? ▼

A brokered CD is a certificate of deposit issued by a bank but bought through a brokerage account instead of directly from the bank. The brokerage lists CDs from many issuing banks in one place. Unlike a bank CD, a brokered CD can be sold to another investor on a secondary market before it matures.

Are brokered CDs FDIC insured? ▼

Yes, when the issuing bank is FDIC insured. Coverage is up to $250,000 per depositor, per issuing bank, per ownership category, and it counts every deposit you hold at that bank, including CDs bought through different brokerages and accounts you opened directly. FDIC insurance does not protect you from losing money if you sell a brokered CD for less than you paid.

Can I sell a brokered CD before it matures? ▼

Yes, through your brokerage’s secondary market, but the price is not guaranteed. If rates have risen since you bought the CD, buyers will pay less than face value and you can lose part of your principal. Most brokered CDs cannot be cashed in early with the issuing bank the way a bank CD can, except in limited cases such as the death of the owner.

What is a callable brokered CD? ▼

A callable CD lets the issuing bank end the CD early, usually after a set call protection period, and return your principal plus interest earned. Banks tend to call CDs when rates have fallen, which leaves you reinvesting at lower rates. Check whether a brokered CD is callable, when the first call date is, and how often it can be called before you buy.

How do brokered CDs differ from bank CDs? ▼

Bank CDs are opened directly with a bank or credit union, usually compound interest, and can be closed early for a fixed penalty with your principal returned. Brokered CDs are bought in a brokerage account, usually pay simple interest into that account, can be sold on a secondary market at a price that may be below face value, and are more likely to be callable.

This article is for general information and is not financial advice. Rates shown are market averages for bank and credit union CDs, not offers; brokered CD terms are set by each issuing bank and brokerage.