Do Banks Offer Higher Certificate Rates At Brokerages Or Directly From The Banks

Ltssharon | May 17, 2023 | 471 posts since 2020

Do banks offer higher certificate rates at brokerages or directly from the banks, or are they the same? In general, I mean. I think I prefer a direct bank, because you can knew the early withdrawal penalty. But then again, are the rates higher at brokerages if you hold to maturity?

In general,is what I am asking.

Thanks.

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Answers

Confused1 | May 17, 2023 | 87 posts since 2018

I bought a $2000 Wells Fargo 9 month CD yesterday at Fidelity at 5.15 APY. That's a lot higher than their website, which is 1.51 APY for a 1 year and 2.50 APY for a 6 month. I think they offer better rates at brokerages when they need money in a hurry and have access to investors ready to buy.
WELLS FARGO BANK NA 5.150000 02/23/2024 05/23/2023

On the other hand I still buy at credit unions because I find their rates are usually higher than banks and sometimes even higher than I can find at Fidelity.
If you don't have a brokerage account already, Fidelity has a new customer deal which is basically free money to you if interested. Open and fund an account with $50 and they will deposit $100 into your account within 25 days and you only have to keep the money there for a short time. That's how I joined and spent months just playing around learning the process and checking the rates. I ended up buying a 30 day CD at $1000 and also a 4 week treasury as a test and the process was so simple that I was hooked. I'm now getting ready to move a large portion of my IRA to Fidelity as well also to buy Treasuries and CD's. You can also sell your CD on the secondary market if you needed to and depending on how rates are moving you may lose money or possibly even make some money if the rates have dropped since you're purchase. I have no interest in that so far and only buy new issues and plan to hold till maturity. So far I have built a monthly CD/Treasury ladder that covers my living expenses through the middle of next year and will continue to do so while short term rates are so high.
If interested here is the link and details of the Fidelity offer.
https://www.fidelity.com/go/starter-pack

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