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I bought a CD on the secondary market for the first time in my life today. Did it just for fun to see how it works. It is from a Chinese bank that has FDIC coverage. The yield at my bid was ~0.85%, but there was a "concession" (fee) that eneded up reducing the yield to ~0.55%. This is a CD maturing in mid-October 2012. It was the highest yield in the list that my broker supplied.

I bid just at the ask (for 99% of the CDs in the list, only an ask was shown, hardly any bids were shown) because I wanted the trade to go through. Next time I will bid a little lower than the ask to see what happens.
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You probably know what you are doing but just in case others here don't, one word of caution on brokered CDs.

While they are typically FDIC insured, they can be very illiquid. If you need your money for any reason prior to maturity, you must find a buyer for it, just like you would a bond. If no one wants to buy your CD, you might find you have to dump it at significant loss or simply wait until it matures. You generally have no provision to surrender the CD early via the issuing bank.

That being said, you can often find better rates on brokered CDs.
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You probably know what you are doing but just in case others here don't, one word of caution on brokered CDs.

Ha. I have no clue.

While they are typically FDIC insured, they can be very illiquid. If you need your money for any reason prior to maturity, you must find a buyer for it, just like you would a bond. If no one wants to buy your CD, you might find you have to dump it at significant loss or simply wait until it matures. You generally have no provision to surrender the CD early via the issuing bank.

Agree. That's why this was an October 2012 CD, only a little more than 3 months from now. I won't need that money between now and then. In fact, I may buy more such CDs.

That being said, you can often find better rates on brokered CDs.

Definitely! Next time I will try bidding a bit lower than the ask and see if I can juice the yield a bit.

That said, it seems a little surreal to call things like 0.5% "yield", all this is more for fun than for profit. I invest elsewhere for real profit.
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Today I bid on a secondary market CD at slightly less than the ask. And they didn't bite. So no sale.
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The easiest (and best) place to bid on CDs and such is Zions Direct. Due the fact of no commissions and that awards are done as a Dutch auction, it's sometimes possible to achieve better yields than elsewhere.

https://www.auctions.zionsdirect.com/
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The easiest (and best) place to bid on CDs and such is Zions Direct. Due the fact of no commissions and that awards are done as a Dutch auction, it's sometimes possible to achieve better yields than elsewhere.

I'll have to try them someday (even though I dislike having scattered accounts all over the place). But the yields are generally still negative on all CDs unless there are some extraordinary deals available.
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https://www.auctions.zionsdirect.com/auction/6310/summary

Farmington CT.....not bad....if you like next to nothing....

Dave
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