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It's possible he's lying.

It's also possible he's buying the CD in a country where there is a higher inflation rate -> higher stated interest, but when you convert the foreign funds back to US dollars, the worsening exchange rate has wiped out all your excess gains.

Maybe he bought the CD a year ago when rates were really that high.

But I agree, most likely is that it's not FDIC insured, so it's really a junk bond instead of a CD.
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