Buying Savings CDs

Most CDs are sold directly by depositories such as banks, credit unions, and savings and loan associations. They are free to set the interest rates and the maturities. However, interest rates do vary among depositories in the same area. Depositories offer a wide variety of CDs with different interest rates and maturities.

Stockbrokers also sell brokered CDs. Brokers shop for the highest-rate CDs at depositories throughout the country. Brokers buy large-denomination CDs and break them up into small and medium CDs. They then offer these CDs to their clients.

Investors may sell their brokered CDs before maturity without incurring a penalty. However, the amount they receive will depend upon the negotiated price. Many brokers do not charge their clients commissions for CDs because they receive commissions from the banks that issued them.

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