Brokered CDs are typically insured by the Federal Deposit Insurance Corp., but you should check with your broker to confirm coverage. They also aren’t subject to early-withdrawal penalties, as traditional CDs typically are. However, if you want to withdraw money from a brokered CD before it reaches maturity, you have to sell it on the brokerage’s secondary market. If interest rates have risen since you opened the CD, you won’t get as much back as you originally paid for it. If rates have fallen, however, you should get more back.
Another potential risk is that your CD may be callable, meaning that if interest rates decline, the brokerage firm may redeem or sell your CD before maturity. While you’ll be able to get a refund on your deposit, you won’t get any potential future interest earnings.
Roxann Cooke, senior director of consumer banking at Chase, recommends that you never make a check payable to “cash,” which could allow anyone to deposit it. Instead, write the intended recipient’s name.
Avoid sharing too much of your personal information on a check. Don’t include your driver’s license number, Social Security number or anything else that a thief could use to steal your identity.
If you’re sending a check through the mail, put it in a security envelope, which has a crosshatch pattern on the interior to mask the envelope’s contents. Or, if you use a standard envelope, wrap the check in a piece of paper before you place it inside.
Cooke suggests taking your check to a post office to mail it rather than putting it in your home mailbox, where a thief may be able to intercept it more easily. For extra protection—say, for a large payment—you can send the check by certified mail, which requires the recipient to provide a signature upon delivery.
