Investing in Certificates of Deposit (CDs)

Ziegler offers a type of certificate of deposit (CD) called a Brokerage CD. Brokerage CDs are CDs that are issued by banks, but with the added convenience of being available for purchase within your brokerage account. The deposits are obligations of the issuing bank, and like a CD that you might buy from a bank, a Brokerage CD carries Federal Deposit Insurance Corporation (FDIC) insurance. CDs are FDIC-insured up to $250,000 per financial institution, per owner on each registration and $250,000 for qualified retirement accounts*.

How do Brokerage CDs Work?

Similar to a bank CD, you agree to place your funds with the issuing bank for the specified term of the CD, and the issuing bank pays you interest at a rate specified at the time of your initial deposit. Frequency of interest payments may be monthly, quarterly, or semi-annual, and will be stated at the time of initial deposit. At maturity (or earlier if there is a call option) your funds plus interest will be retuned.

Advantages of Brokerage CDs

Liquidity. Brokerage CDs, like those offered through Ziegler, may be traded on the secondary market. Although a Brokerage CD will return an investor’s principal at maturity, its value, if sold prior to maturity, will fluctuate based on size, time remaining before maturity and the level of interest rates.

Flexibility. A Brokerage CD may be transferred from one brokerage firm to another, allowing the owner to consolidate assets at one firm.

Rates. Brokerage CDs are offered at competitive market interest rates. Contact your Ziegler financial advisor or our Client Service Center at 888.816.4466 for today’s rates.

Maturities. We issue Brokerage CDs with maturities ranging from three months to 20 years.

*On October 3, 2008, Congress temporarily increased FDIC deposit insurance from $100,000 to $250,000 per depositor through December 31, 2009. Prior to that, the basic insurance was $100,000 per depositor per insured bank.

B.C. Ziegler and Company does not provide tax or legal advice. Please consult with your tax advisor regarding the suitability of an investment decision. Redemptions of CDs prior to the maturity date may result in significant loss of principal due to changes in interest rates and limited liquidity of the CDs in the secondary markets. Each CD is a deposit obligation of a U.S. Depository institution. Interest paid on the CD cannot remain on deposit at the depository institution and will be paid to the depositor according to the terms of the CD.