Question:

When brokerage CDs are parceled out to multiple issuers, is the total amount FDIC insured?

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If you invest $500,000 in a brokerage CD, is it parceled out to 5 issuing banks at $100,000 each and thus fully FDIC insured?

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  1. great question i would like to see the answer!


  2. thats a good question

  3. NO.

      A "CD" is a contract. If what you are calling a "brokerage CD" is issued by the brokerage then YOU have NO FDIC insurance. Brokerages have different types of insurance.

    Your "contract" may be with the brokerage NOT the bank. If they put the money in an FDIC insured bank that would insure THEM not YOU.

    But you can buy 5 CDs in 5 separate banks through the brokerage and be fully insured up to $100k per bank. In that case the brokerage is only acting as an agent.  

    So be very careful and sure about the wording.

    Your use of the term "brokerage CD" disturbs me.

  4. CDs are not typically FDIC insured.  Look carefully.  I'll bet yours isn't either.  However, you are correct. If it is parceled out to 5 different banks, it would be insured if they were insurable.

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