Merrill A Bank of America Company Merrill A Bank of America Company Open an account Login Open Menu bar Find answers to common questions at MerrillSchedule an Open an accountwith Merrill Choose and open an accountwith Merrill Already a Merrill client? Log in to get startedwith Merrill In exchange for depositing your money into a certificate of deposit (CD) for a fixed time period, the issuer agrees to pay you back at a predetermined interest rate. When the CD matures, you get back the principal amount plus any interest that has accrued. Brokered CDs are purchased through a brokerage firm instead of directly at a bank, and yields on brokered CDs may be higher than yields on similar bank CDs. If you need to access your funds before the CD's term ends, you may attempt to sell your CD if a market exists. The price can fluctuate based on the current interest rate environment. Once you're logged into your account, you can use Merrill's fixed income Screener under the Research tab to search for CDs to purchase. Use pre‑defined search parameters or select your own criteria to find the CDs that align with your preferences. If you already know the CUSIP number or issuer of the CD you want to purchase, you can go directly to the Trade tab and select Fixed Income to enter that information. Find your preferred way to invest, whether you're interested in simple stock trades or advanced options and margin trading. Select to learn more aboutStocksSelect to learn more aboutMutual FundsSelect to learn more aboutETFsSelect to learn more aboutFixed IncomeSelect to learn more aboutOptionsSelect to learn more aboutMargin Trading Expand all Purchasing a brokered CD is similar to depositing funds in a bank. In exchange for the money you pay for the CD, the issuer agrees to pay you a predetermined interest rate that's typically higher than the rates offered on savings accounts. When the term is up (when the CD matures), you get back the principal (or face amount) plus any interest that has accrued. If you need to access your funds before the CD's term ends, you may attempt to sell your CD if a market exists. The price can fluctuate based on the current interest rate environment. There are several factors to consider when choosing a CD. First, when do you need the money? If you need it soon, consider a CD with a shorter term. If you're saving for something five years down the line, a CD with a longer term and higher rate may be a more prudent choice. IAlso, consider the economic environment. If it seems that interest rates may rise, or if you want to open multiple CDs, CD laddering can be a good option. Brokered CDs come in varying terms and generally require minimum purchases of $1,000. The rate you earn typically varies by the term. Note that Brokered CDs also have maximum purchase limits. Overall interest rates may change during your CD's term. If rates rise, you miss out on earning those higher rates, since your money is committed for the CD's term. However, if rates go down, you benefit: You still earn the higher rate that was offered when you opened the CD. CD laddering (buying multiple CDs of varying term lengths) can help address this concern. It can also be a way for you to take advantage of longer terms (and therefore typically higher interest rates) while still giving you access to some of your money each year. With a CD ladder, you divide your initial investment into equal parts and invest each portion in a CD that matures every year. For example, say Leo has $10,000. To build a CD ladder, he invests $2,000 each in a 1-year, 2-year, 3-year, 4-year and 5-year CD. As each CD matures, he reinvests the money at the current interest rate or uses the cash for another purpose. If Leo reinvests his money, he might choose a new 5-year CD, which would ensure he has one CD maturing each year as long as he continues laddering. Callable CDs give, in its sole discretion, the issuer the right to terminate or "call back" your CD before it matures. This is more likely to happen if interest rates are lower than they were when you bought your brokered CD. You will still get back your principal and accrued interest up until that point, but you will miss out on any future interest that you could have earned if that brokered CD had not been called. The market value of a brokered CD purchased through your brokerage account will fluctuate and, at times, may show a potential market value of more or less than the price you paid or face value of the CD. However, if you hold a brokered CD to maturity, you'll get back the principal amount plus interest; these price fluctuations only come into play if you sell your CD before maturity. Note that brokered CDs held to maturity do not auto-renew. You'll need to purchase another CD if you desire. Merrill may maintain a secondary market in brokered CDs, although it's not obligated to do so. You may be able to sell your brokered CD before it matures, but the price you receive could be less than your original investment. Early withdrawals of brokered CDs are generally not permitted. In limited circ*mstances, such as the death of the owner of the CD, early withdrawal may be permitted. Some brokered CDs, known as callable CDs, are subject to early redemption by the issuing bank at its sole discretion. They may offer higher yields than noncallable CDs, which return their principal at the stated maturity date. Callable CDs offer higher yields due to your risk of having your principal returned early and needing to purchase a new CD in a lower-interest-rate environment. Brokered CDs purchased through your Merrill account pay simple interest; that is, interest is not compounded. FDIC insurance covers all types of deposits received at an insured bank per account ownership category. FDIC insurance does not cover investments, even if they were purchased at an insured bank under the FDIC's general deposits insurance rules. You can calculate your insurance coverage using the FDIC's online Electronic Deposit Insurance Estimator (EDIE) at www.fdic.gov/edie/ You are responsible for monitoring the total amount of deposits (including CDs, checking, savings and money market deposit accounts) that you hold with any one issuer, directly or through an intermediary, in order for you to determine the extent of FDIC insurance coverage available to you on your deposits. FDIC insurance covers all types of deposits received at an insured bank per account ownership category. FDIC insurance does not cover investments, even if they were purchased at an insured bank under the FDIC's general deposits insurance rules. You can calculate your insurance coverage using the FDIC's online Electronic Deposit Insurance Estimator (EDIE) at Go to third-party websitewww.fdic.gov/ediepopup You can visit the FDIC website or call the FDIC directly at 877.ASK.FDIC (877.275.3342). MAP5724131-06302024 Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions. This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF). Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp"). Merrill Lynch Life Agency Inc. (MLLA) is a licensed insurance agency and wholly owned subsidiary of BofA Corp. Banking products are provided by Bank of America, N.A. and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation. Investment products offered through MLPF&S and insurance and annuity products offered through MLLA: Privacy|Security|Glossary|Advertising practicespopupAdvertising Practicespopup © 2024 Bank of America Corporation. All rights reserved. 4326521
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How do CDs work?
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Benefits of Brokered CDs
How to purchase CDs
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Frequently Asked Questions
How do CDs work?
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What is a CD ladder and how do I build one?
What are callable CDs?
How are brokered CDs different from traditional bank CDs?
What does the FDIC insure?
Where can I get more information about FDIC insurance?
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value Are Not Deposits Are Not Insured by Any Federal Government Agency Are Not a Condition to Any Banking Service or Activity
