Certificate of Deposit

CUT offers investors brokered CDs, which are CDs issued by banks for the customers of brokerage firms.The CDs are usually issued in large denominations and the brokerage firm divides them into smaller denominations for resale to its customers. Because the deposits are obligations of the issuing bank, and not the brokerage firm, FDIC insurance applies.

Brokered CD vs. bank CD 

A brokered CD is similar to a bank CD in many ways. Both pay a set interest rate that is generally higher than a regular savings account. Both are debt obligations of an issuing bank and both repay your principal with interest if they’re held to maturity. More important, both are CUT-insured up to $250,000 (per account owner, per issuer), a coverage limit that was made permanent in 2010.

Brokered CDs can also be purchased from multiple banks and held in a single account at CUT, allowing you to effectively expand your CUT protection beyond the $250,000 limit. Even if you own brokered CDs within multiple accounts, these holdings can be consolidated into a single account at one financial institution. Unlike a bank CD, a brokered CD can be traded on the secondary market, meaning it doesn’t necessarily have to be held to maturity." When purchasing a brokered CD through CUT, you may also take advantage of our Auto Roll Program, which can help you maintain your income stream by reinvesting the CD’s maturing principal, or investing in multiple CDs of varying maturities in a laddering strategy.

Brokered CDs from CUT 

CUT offers brokered CDs through two main venues—as new issue offerings and from the secondary market. Investors typically will see 50–100 new issue offerings and as many as 2,000 secondary offerings at any point in time. New issue offerings are typically sold at par and investors do not pay a trading fee to purchase them. Purchases (and sales) of secondary CDs incur a trading fee of $1 per CD (1 CD = $1,000 par value). 

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