Deciding How to Invest Can Be Complex
Investing your hard-earned money requires careful consideration of various options that can help you grow your wealth while minimizing risks. One investment avenue that deserves attention is brokered certificates of deposit (CDs). Here, we will explore the benefits of investing in brokered CDs and why Sun Cities Financial Group, based in Phoenix, AZ, is a reliable partner for your investment needs.
Understanding Brokered CDs
What are brokered CDs? Brokered CDs are certificates of deposit that banks issue to brokerage and investment firms, to offer to their customers. The difference between brokered CDs vs bank CDs is that brokered CDs are purchased through the brokerage rather than the bank. They are FDIC-insured, with interest rates that are often higher than those of a savings account. The reason brokerage CD rates are higher is because when you purchase a CD, you are locked in for a certain period, typically three months to 10 years. With a brokerage account, you can buy brokered CDs from different banks and credit unions, with a minimum investment set by the brokers- usually about $1,000. You can add funds to your brokered CD but generally, you must do this in increments of $1,000.
Competitive Interest Rates
Brokered CDs typically have a higher yield than traditional CDs, but CDs fell out of favor after the great recession. Since that time, most people have been ignoring CDs in general, because the rates have been really low. Current brokered CD rates, however, are much better. A regular 1 year CD can net you a 4 percent return, and if you look for the best-brokered CD rates, you can earn significantly more than that. The reason brokered CDs have a greater annual percentage rate is that a broker can make a deposit that is much larger than that of the individual investor. However, there may be an intermediary fee upon the purchase of a brokered CD. It pays to purchase different brokered CDs from a variety of banks because you can get the best rate that way. Sun Cities Financial Group has access to a network of banks, allowing you to find the best-brokered CD rates available in the market.
Professional Guidance and Expertise
If all of this seems a little bit confusing or complicated, that simply underscores the need to partner with a reliable investment firm, for advice that aligns with your best interests. A prudent financial advisor can help you understand the benefits and risks of brokered CDs and other investments. An advantage of brokered CDs is that you can pull your money before the maturity date without incurring a penalty, as long as you sell the brokered CD on the secondary market. This is not a feature available with a standard bank CD.
The risk, however, is that selling a CD before maturity may reduce its value. That’s because, while purchases of brokered CDs through the brokerage are FDIC-insured, sales and purchases through the secondary market may not be. Working with a reputable and financially responsible brokerage can help ensure you the best return, and confirm that your deposit is FDIC-insured.
Another potential risk of brokered CDs is they are sometimes callable. This means the issuing bank can terminate the CD before it matures. If this happens, you will not lose your initial investment and earnings up to the call date, but you could lose out on future earnings. The reason a bank would call a CD is to avoid paying higher rates for the rest of the terms if the interest rates drop.
Personalized Investment Strategy
When you find the right investment advisor, you’ll have a knowledgeable collaborator to help you weigh the risk and benefits of any investment, including brokered CDs. Sun Cities Financial Group takes a personalized approach to understanding your investment goals, risk tolerance, and liquidity needs. They can help design an investment strategy that incorporates brokered CDs as part of a comprehensive investment plan.
Trust the Proven Industry Leaders at Sun Cities Financial Group
Investing in brokered CDs can be a smart move to diversify your portfolio, earn competitive interest rates, and enjoy FDIC insurance protection. Having served individuals and families in Phoenix, Arizona for over 15 years, Sun Cities Financial Group is well-equipped to guide you through the process of investing in brokered CDs, leveraging their expertise and personalized approach. In addition to working with more than 6,000 Federally insured banks, all covered by the maximum FDIC insurance protection, we also employ only dedicated and honest professionals committed to their clients’ best interests. Accredited with an A+ from the Better Business Bureau (BBB) for providing outstanding services to our clients, we have been in business since 1998. Founded to provide safe and guaranteed returns to our clients, we protect our clients’ savings in ways they aren’t even aware of, and our staff gets excited about the clients’ reactions. When you invest with us, we will go above and beyond to exceed your expectations, and do the work so that you can reap the benefits by earning more interest while maintaining the safety of your principal. Start exploring the benefits of brokered CDs, by consulting with Sun Cities Financial Group today, by calling 623-933-4100, or by contacting us through our website.