Ask Terry Questions Brokered CDs

Brokered CDs

By Terry Savage on December 11, 2018 | Chicken Money

We have a few CD’s and they always bring a frown to my face when we go to renew at these low interest rates. Today the folks at Bank of America pitched their partnership with Merrill Lynch (Merrill Edge). They showed me that the interest rates on their ‘brokered CDs’ are much better than what the BofA are offering. These are FDIC insured and I think I understand that if we just use this ML account to buy fixed income instruments like this, there are no brokerage (or other) fees. What is your opinion of this opportunity?

Terry Says

And they do this because they suddenly decided they like you?  There are plenty of “catches” in the brokered CD business. Why don’t you just read my article on How to Buy US Treasury bills.

The 6-month T-bill is currently yielding about 2.5% and it’s an IOU directly from the government.  Plus you don’t pay state income tax on the earnings!  Easy to buy through, per the article.

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