The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Bonds & Fixed Income Investments

URL:  http://boards.fool.com/i-was-unable-to-find-the-penalty-on-any-of-the-30787955.aspx

Subject:  Re: Ameritrade CDs Date:  7/21/2013  3:28 PM
Author:  aj485 Number:  35033 of 35345

I was unable to find the penalty on any of the CDs listed for early withdrawal...

There generally isn't a penalty for early withdrawal for CDs on the secondary market, but to cash out of those CDs before maturity, you will have to sell the CD back into the secondary market - generally getting a lower price than you would have paid, and possibly paying a commission besides (in addition to the commission you paid when you purchased).

What pros and cons are there to purchasing CDs from Ameritrade or ones that are on the secondary market?

If you pay above par in order to get the higher interest rate, the amount above par is a loss to you in case the CD is called, matures, or the issuer is shut down by the FDIC.

You need to check the call provisions on the CD.

You need to make sure that the CD actually is insured by the FDIC.

You might want to check other brokerages to be sure you are getting a reasonable return.

AJ
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us