re: Brokered CDs. yea or nay

You buy a $10,000 CD at 5% for a year, you probably get a $500 payment every 6 months. 2 years would be the same. You can reinvest the interest however you’d like, but you can’t retroactively buy the CD you bought 6 months ago, so it doesn’t compound in the CD. If you invest it in a money market each payment, you can compound it there.

It’s reinvestment risk, and it’s true of corporate bonds, treasuries, and brokered CDs, among other things.