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Take precautions before buying a CD from a broker
July 12, 2013 - 9:52am
While using deposit brokers has grown in popularity because brokers often can negotiate higher interest rates, the Certificates of Deposit (CDs) they sell may involve more risks than those purchased directly from an insured bank, such as Bath State Bank. For example, because the FDIC does not have the authority to approve deposit brokers and there are numerous examples of con artists running off with investors' money, consumers are advised to use a reputable deposit broker, preferably a professional they already know and trust.
Also, consumers should be skeptical if the interest rate being advertised is significantly higher than general market rates, because that may be a sign that the broker is trying to lure in customers to sell them a non-insured product that's not in the depositor's best interest. If you have any questions about CDs, please ask us.