Secondary Market CDs
Secondary Market CDs also called Brokered CDs, they tend to have 50 basis points higher yields than the safe bond funds. You need to find a financial advisor who can help you purchase these Brokered CDs.
A few caveats of Brokered CDs:
- Don't buy Callable CDs. Because if rates low or fall, the issuer might redeem them.
- Make sure you don't need the fund before maturity date.
- Only principal of CDs are FDIC-insured.
Direct CDs
If you don't want to talk to an advisor, you can purchase Direct CDs from a bank or credit union by yourself. They have comparable yields.
We will discuss another safe investment in next blog post.