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Question about brokered CD
Posted on 11/9/22 at 4:18 pm
Posted on 11/9/22 at 4:18 pm
I purchased a brokered 12 month CD 3 months ago in my vanguard account. The current value is $500 less than the purchase price. If I hold the CD till maturity is it possible to lose money? Or is the published rate guaranteed at maturity?
I know, why would I buy something I didn’t understand…I thought I did understand it, but was surprised to see the current value less than the original value. And, also, I’m dumb!
I know, why would I buy something I didn’t understand…I thought I did understand it, but was surprised to see the current value less than the original value. And, also, I’m dumb!
3
Posted on 11/9/22 at 5:07 pm to tigerlife00
If you hold it until it matures you will get the published rate.
Posted on 11/9/22 at 5:36 pm to tgrmeat
"If you hold it until it matures you will get the published rate."
Yes. Think of it as being similar to a bond in that the value will go up or down depending on interest rates. If they did not do this, everyone would cash them in to buy a better one in a rapidly rising rate environment.
Yes. Think of it as being similar to a bond in that the value will go up or down depending on interest rates. If they did not do this, everyone would cash them in to buy a better one in a rapidly rising rate environment.
Posted on 11/9/22 at 6:15 pm to tigerlife00
quote:
know, why would I buy something I didn’t understand…I thought I did understand it, but was surprised to see the current value less than the original value. And, also, I’m dumb!
, I can explain brokered CDs until I’m blue in the face, but the moment the first statement comes with a lower value than the client purchased they panic a bit. We always have a follow up after the first statement is sent just to address this exact thing. No worries. 
Posted on 11/10/22 at 7:55 am to tigerlife00
Is your broker ok? I remember a couple years ago in Baton Rouge a guy got shot by the cops and he was just selling CDs
Posted on 11/10/22 at 8:24 am to el Gaucho
One of the best gaucho posts of all time
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