(Note, however, that Treasury interest, unlike CD interest, is exempt from state and local income tax.) Rein in Risk of Rising Ratesīuy only brokered CDs that you intend to hold to maturity. A Synchrony Bank brokered CD maturing in April 2027 was yielding 2.88%, while 10-year direct CDs offered top yields of about 2.35% and the 10-year U.S. Looking at noncallable secondary-market CDs offered by Fidelity in mid May, a Capital One CD maturing in May 2022 offered a yield of 2.53%, compared with 2.35% for the top-yielding five-year direct CD listed on. Roth, who started adding brokered CDs to client portfolios about two years ago, says he has been finding the best deals in the secondary market. You can buy brokered CDs as new issues, which are typically sold at par, or in the secondary market, where they may trade at a premium or discount to par. The Financial Industry Regulatory Authority warned last year that some firms were using high-yield CD offers as bait to lure seniors into meetings with salespeople, who would then pitch a high-commission product, such as an equity-indexed annuity. They may offer slightly higher yields, but they allow the bank to terminate the CD early, meaning you may not enjoy that yield for very long.Īlso be wary of CDs with unusually high yields, and work with a brokerage firm you trust.

When shopping for brokered CDs, skip the ones that are callable.

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