Which statement about brokered certificates of deposit is NOT true?

Brokered certificates of deposit (CDs) are a type of investment product that can offer unique features. The statement that they are redeemable at any time subject to an interest penalty highlights a key characteristic of traditional CDs, which typically impose penalties for early withdrawal. However, brokered CDs may have different rules regarding early redemption compared to standard bank-issued CDs.

When it comes to their liquidity, brokered CDs may not always be redeemable at any time without penalty; instead, they often need to be sold in the secondary market if investors wish to access their funds before the maturity date. This means that while some brokered CDs offer liquidity options, the terms of these investments can vary widely, and thus the statement that they are always redeemable at any time is misleading.

In contrast, brokered CDs can be traded in the secondary market, which allows investors to sell their CDs to other investors if they need cash before maturity. This trading ability can provide a level of flexibility not present in traditional CDs. Additionally, brokered CDs frequently offer yields that are higher than those found at local banks due to the broader range of investment options and competitive nature of the marketplace brokers operate in.

Thus, the correct understanding is that brokered CDs are often less