As I understand it, large brokerage houses like Scottrade sell "pieces" of a very large CD to their customers,

Question

and that the company actually holds the huge CD in its name. If this is correct, does the $100,000.00 government gaurantee extend to each person who bought a piece of the large CD? I may not understand how this works. Please explain.

Answer 1

often they sell pieces of $100,000 cds from an FDCI insured bank so these are insured but this is not always the case so check each individual CD

Answer 2

brokers aren't fdic insured in the first place, so it doesn't matter.

you should be covered by sipc, though.