BROKERED CERTIFICATE OF DEPOSIT

A certificate of deposit (CD) that is purchased through a brokerage firm, or from a sales representative other than a bank. The bank is still the initiator of the CD, but has outsourced to firms that strive to locate potential investors. A higher price is generally paid for these types of CDs, as they are in a more competitive market.

As with all CDs, if held to maturity, the holder with receive the full principal with interest. However, if desired, brokered CDs can be traded with the risk of a loss on the investment.