1Each CD is a direct obligation of the relevant issuer and is not, directly or indirectly, an obligation of Merrill. Merrill will not be obligated for amounts not covered by deposit insurance. Nor will Merrill be obligated to make any payments to satisfy a loss that might be incurred as a result of (i) a delay in insurance payouts applicable to a CD, (ii) the receipt of a decreased interest rate on the reinvestment of the proceeds received as a result of the payment of the principal and accrued interest of the accreted value of a CD prior to the scheduled maturity in connection with the liquidation of an insured institution, or (iii) payment in cash of the principal and accrued interest of the accreted value of a CD before maturity in connection with the liquidation of an insured institution or the assumption of all or a portion of its deposit liabilities at a lower interest rate. In connection with the latter, please note that the amount of a payment on a CD that had been purchased at a premium in the secondary market is based on the original par amount (or, in the case of a zero-coupon CD, its accreted value) and not on any premium amount. Therefore, the full amount of the premium will be lost as a result of such a payment. Factor these possible delays into investment planning. Merrill also will not be obligated to credit an account with funds in advance of payments received from the FDIC.
Brokered Certificates of Deposit
Diversify your portfolio holdings, generate income and protect principal with FDIC insurance.
Managing the cash in your investment account is an important part of your overall wealth management strategy. Brokered Certificates of Deposit (CDs) allow you to place investment cash into a time deposit that can help you earn a competitive interest rate for a fixed period of time. And unlike traditional CDs, Brokered CDs can be held in your Merrill investment account, along with your other stock and bond holdings.1
Diversify your investment holdings
A Brokered CD may be a good choice for you if you want to complement your portfolio holdings with more conservative, secure investments. Brokered CDs can offer you:
- FDIC insurance coverage, up to applicable limits
- A range of maturities from one month to 30 years
- Potentially attractive returns on the portion of your portfolio allocated to cash
- Flexibility to create a ladder with staggered interest payment and maturity dates
- Convenient redeposit of interest and principal payments into your Merrill account
Brokered CDs also come in a range of CD types, including:
- Non-callable CDs which cannot be redeemed by the issuer before their maturity date
- Callable CDs which generally offer a higher yield than non-callable CDs because the issuer can redeem them before the maturity date
- Step-up CDs which offer coupons that increase on pre-determined dates
Diversify your investment holdings
Unlike typical investment products, CDs are issued by banks and savings associations and are insured by the Federal Deposit Insurance Corporation (FDIC), up to appliable limits.1 When investing in Brokered CDs, you may be able to gain access to CDs issued by numerous banks and savings associations, increasing the total coverage. Each CD is insured up to $250,000 per depositor, per ownership category, per bank. For more information, please visit FDIC.gov.
Considerations
While CDs are conservative, low-risk investments, they do still carry some risks that you should consider before purchasing.
- CDs have limited liquidity and may be most appropriate for purchasing and holding to maturity.
- Early withdrawals are generally not allowed, except in limited circumstances.
- CDs can be subject to interest rate risk and credit risk. There can be no assurance that the credit quality of the issuing bank will not deteriorate or the bank will not fail prior to the maturity of the CD.
- CDs may be sold in the secondary market, but the price you receive is subject to market conditions and may be lower than the price you originally paid.
If CDs bought through Merrill must be sold before maturity, it may be possible to do so in the secondary market. Merrill maintains a secondary market in CDs, but is not obligated to do so.
Additional choice from Bank of America
Depending on your needs or goals, you may also want to consider Certificates of Deposit, issued by Bank of America. These CDs offer many of the same features and benefits of Brokered CDs, but must be held in a Bank of America account. Visit the Bank of America website to learn more.
Talk to your Merrill advisor to learn more about how Brokered CDs may help you manage your investment cash and complement your larger financial approach.
Frequently asked questions
Explore our other solutions
Whether you’re defining goals, addressing change or figuring out how to move forward, Merrill and Bank of America offer a wide range of solutions to help you take the next step and stay on track.
Find the right advisor for you
Our financial advisors are committed to putting your investing needs and priorities first. Here’s how you can get started with an advisor:
