Brokerage CDs

A brokerage CD is simply a CD that is being offered by a brokerage. These CDs are are still issued by the same banks, and you might be able to get higher rates here because there’s a larger set of available banks.

You can trade brokerage CDs on the secondary market, which does allow you to avoid the interest rate penalty if and when you want to cash out on the CD. Instead of incurring the withdrawal penalty, you simply sell the rights to the CD to a secondary party.

One thing to keep in mind however is that some brokerage CDs may not be fully FDIC insured. Especially with banks failing left and right, you should make sure the CD is FDIC insured before making a deposit!