Insuring Multiple Jumbo CDs with the FDIC?

Question

ok, I know each person is allowed $100,000 worth of FDIC insurance per banking institution, so a married couple could have 2 100K jumbo CDs FDIC insured.

But, are there any banking/investment institutions that can issue CDs from multiple sources so that you can have more than 100K per person insured, (so that you don't have to go all over the place & different banks to have your money safely insured)

Answer 1

First, a couple can only have 100000 in insurance.  The insurance is "per owner" so if they own it together as a joint account then it's the same owner.

Don't get CDs at banks.  Get them in a brokerage account.

CDs sold through brokers usually have higher yields.  

Broker CDs can be sold.  At a bank you have to pay a penalty to redeem early.

When I want my money back, I have had nothing but trouble with paperwork because I have to "close" the account and Amcore Bank does not want to let the money go, so they create hassles.  I've never had a problem with a broker.

If you buy newly issued CDs and hold them until maturity, there are no commissions.  The broker is paid a fee by the bank to place the CD.

Answer 2

Any bank with a brokerage department can sell you CDs on the secondary market which will be from other banks, so you can diversify your coverage. The downside is there will be commissions and it is harder to tell what your are getting since the price will be marked up or down according to the interest rate. Example, if the going CD interest rate is 3% you might pay $105K for a brokered $100K CD paying 4% or $95K for a  $100K CD paying 1%. To further complicate matters the time to maturity will be unual since these are "used" CDs.....you might have buy a CD that matures in 13months and 12days. Your broker might also be able to buy you "new" CDS offered from other banks though again there will be a commission. I am sure you also realize if your money is in an IRA the cap goes up to $250K. Another consideration is that if you bank in one of the big "ten" banks in the U.S.  most people believe the feds would not let any of those intstitutions fail hence they would be rescued at the taxpayers expense if in trouble. Look at Bear Stearns, not even a bank, an investment house, was bailed out by the feds, yes Morgan Stanley bought them but only with the fed backing their worthless paper.  If you want absolute peace of mind,It may be worth the hassle of using several banks to protect your assets. Just think how many people wish they had your problem:)

Answer 3

It does get rather complicated.  One thing that you might have neglected to consider is the interest on the jumbo CD might be forfeitted because it would be an amount above the 100k.  One possibility that would allow you one stop shopping for CDs is to open a brokerage account with a stock broker that sells CDs from various financial institutions.  You can then buy CDs from multiple institutions at just one location and you might possibly get better rates in the process because you have access to various different CDs.  

For example Fidelity currently offers CDs from multiple sources yielding 2.8% for 3 months to 5.0% for 8 years.