You walk into your bank, ask about CD rates, and the teller slides a sheet across the counter with two or three options. You pick one, sign the paperwork, and that’s it.
Your money is locked up for six months or a year, earning whatever rate that one institution offers you.
Most people never question this process. But Schwab’s latest research makes a compelling case that you might be leaving money on the table by limiting yourself to the CD menu at a single bank.
If you’ve been parking cash in bank CDs without ever considering what’s available through a major alternative, you could be missing out on better yields, broader insurance protection, and a level of flexibility that bank CDs simply don’t provide.
Brokered CDs open the door to rates your bank won’t show you
The core difference is simple. A bank CD comes from one institution. A brokered CD comes through a brokerage firm that aggregates CD offerings from dozens, sometimes hundreds, of FDIC-insured banks across the country.
According to Schwab, this wider selection gives you access to a broader range of maturities, yields, and structures than any single bank can provide.
Think about it this way. Your local bank might offer a 12-month CD at 3.5% APY. But through a brokerage platform like Schwab CD OneSource, you could compare 12-month CDs from dozens of issuing banks and potentially find one paying 4.0% or higher.
As of mid-March 2026, the best CD rates available range from approximately 3.50% to 4.30% APY, depending on term length, according to NerdWallet’s CD rate tracker.
You also get maturity options your bank probably doesn’t offer
Brokered CDs are available in terms ranging from one month to 30 years, according to Schwab. Most traditional bank CDs top out at five years.
If you want a short-term, three-month CD or a longer-duration option to lock in today’s rates for a decade, a brokerage account makes that possible. And you can hold all of these CDs alongside your stocks, bonds, and other investments in the same account.
How brokered CDs expand your FDIC protection beyond $250,000
The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. That limit has been in place since 2010, and it covers both principal and accrued interest. If you have $300,000 in CDs at a single bank under a single ownership category, $50,000 of that sits uninsured.
Brokered CDs solve this problem without requiring you to physically open accounts at multiple banks. When you buy brokered CDs from different issuing banks through your brokerage account, each CD is covered up to $250,000 by the issuing bank’s FDIC insurance. According to the FDIC, deposits at separate FDIC-insured institutions are insured independently.
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That means you could hold $250,000 in CDs from Bank A, another $250,000 from Bank B, and $250,000 from Bank C, all sitting in one brokerage account, and each amount would be fully insured.
For savers with larger cash positions, this is a significant advantage over parking everything at a single bank.
Brokered CDs make building a CD ladder far easier
A CD ladder is a strategy where you split your cash across multiple CDs with staggered maturity dates.
So, instead of locking all your money into one 3-year CD, you spread it across 1-year, 2-year, and 3-year CDs so that a portion of your money matures every year. This gives you regular access to cash while still capturing higher yields on longer-term CDs.
According to Schwab, a single brokerage firm will generally offer a wide enough range of maturity dates to build a one-, two-, or five-year ladder that meets your investment goals. Doing the same thing with bank CDs would mean visiting multiple individual banks, filling out separate paperwork at each one, and managing multiple statements.
A practical CD ladder example
Here’s how a basic 3-year CD ladder might work with $30,000:
- $10,000 in a 1-year brokered CD
- $10,000 in a 2-year brokered CD
- $10,000 in a 3-year brokered CD
When the 1-year CD matures, you reinvest it into a new 3-year CD. A year later, the original 2-year CD matures, and you do the same. Over time, you always have a CD maturing annually, and your entire ladder earns the higher rates that longer-term CDs tend to offer. Through a brokerage, you can build and manage this entire structure in one account.
The trade-offs you need to understand before buying brokered CDs
Brokered CDs are not a straight upgrade over bank CDs. They come with specific risks that Schwab outlines clearly, and if you don’t understand them before buying, you could end up worse off.
Selling early could mean losing money
Unlike bank CDs, most brokered CDs don’t charge early withdrawal penalties. Instead, if you need your money before maturity, you sell the CD on the secondary market. The price you get depends on current interest rates.
If rates have risen since you bought your CD, your lower-yielding CD will be worth less than what you paid for it. If rates have fallen, you could sell at a profit.
But there’s no guarantee of either outcome, and there’s no guarantee a buyer will be available at the price you want.
Callable CDs can cut your returns short
Some brokered CDs are callable, meaning the issuing bank can redeem the CD before its maturity date. Schwab notes that this typically happens when interest rates decline.
The bank calls back your higher-rate CD, returns your principal and earned interest, and you’re left to reinvest at whatever lower rates are available. Before buying any brokered CD, you should check whether it’s callable or non-callable.
Brokered CDs pay simple interest, not compound interest
Here’s a detail that often gets overlooked. Bank CDs typically compound interest daily or monthly, meaning your interest earns interest over the term. Brokered CDs, on the other hand, generally pay simple interest.
According to an E*TRADE’s comparison of bank and brokered CDs, interest from a brokered CD is deposited into your cash account rather than reinvested into the CD itself. On smaller amounts or over shorter terms, the difference is minimal, but over longer periods and with larger balances, compound interest adds up.
Brokered CDs make the most sense for these types of savers
Not everyone needs to switch from bank CDs to brokered CDs. If you have a small amount to park for a short period and your bank offers a competitive rate, a traditional CD may be perfectly fine. But for certain types of savers, brokered CDs fill gaps that bank CDs cannot.
Scenarios where brokered CDs are worth exploring
- You have more than $250,000 in cash savings: Spreading your CDs across multiple issuing banks through a brokerage account gives you FDIC coverage on each CD without the hassle of managing separate bank relationships.
- You want to build a CD ladder: The variety of maturities available through a brokerage makes laddering straightforward. You can manage a 5-year ladder from a single account.
- You already have a brokerage account: If you hold investments at Schwab, Fidelity, or Vanguard, you can add brokered CDs alongside your stocks and bonds without opening a new account.
- Your bank’s CD rates are below average: Major brick-and-mortar banks often offer lower CD rates than online banks and brokered options. If your bank is paying 2.5% on a 1-year CD while brokered CDs are paying closer to 4%, the difference on a $50,000 deposit is $750 in a single year.
What brokered CDs cost and how fees compare to bank CDs
Bank CDs are generally free to open. You deposit your money, earn the stated rate, and pay nothing unless you withdraw early. Brokered CDs can be different.
Some brokerages charge a commission or fold a markup into the CD’s yield. Others, like Schwab, receive a placement fee from the issuing bank, which means you may not see a separate charge but the yield you receive could already reflect that cost.
According to Schwab, higher transaction costs for a brokered CD may reflect the potential benefits of a wider and more diverse offering. A brokerage may aggregate and vet CD options, provide access to multiple banks, shop for competitive rates, and assist with renewals.
Still, you should always compare the net yield you’re actually earning (after any fees) to what’s available from a direct bank CD or high-yield savings account.
Why the rate environment in 2026 makes this decision more urgent
The Federal Reserve cut its benchmark interest rate three times in 2025, and CD rates have been falling in response. According to Bankrate’s 2026 CD rate forecast, yields are likely to keep declining this year.
The best available rates as of March 2026 sit in the 3.50% to 4.30% range, but those numbers are expected to drift lower as the year progresses.
That’s why it’s now a particularly important time to compare your options. If you lock in a competitive CD rate today through a brokered CD, you protect that yield, even if rates fall further over the next 12 to 24 months. Waiting could mean settling for a lower rate later.
The practical next step
Before committing to any CD, compare the rate your bank offers against what’s available through at least one brokerage. Look at:
- The APY on comparable terms (same maturity, same deposit size)
- Whether the brokered CD is callable or non-callable
- Any transaction fees or commissions the brokerage charges
- Whether the CD pays simple or compound interest
- Your total FDIC exposure at each issuing bank
If you already have a brokerage account, checking brokered CD rates takes five minutes. If you don’t, platforms including Schwab CD OneSource, Fidelity, and Vanguard all offer broker CD marketplaces where you can compare rates from multiple banks in one place.
Your bank’s CD is convenient, but convenience has a cost
There is nothing wrong with a bank CD. It’s simple, predictable, and FDIC insured. But if you’re choosing a bank CD because it’s the only option you’ve ever been shown, you’re making a decision based on limited information.
Schwab’s comparison of brokered and bank CDs shows that a wider market of options exists, and for many savers. Those options could mean better rates, stronger insurance coverage, and more control over how and when your money matures.
The rate environment in 2026 makes this comparison even more relevant. With CD yields expected to keep falling, the sooner you shop around, the better rate you can lock in.
Related: What falling interest rates mean for investing in bonds, CDs
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