Investment Minimum CDs trade in denominations from $1,000 up to $100,000. The minimum investment amount at Scottrade is $5,000. CDs can be purchased in increments of $1,000 after the minimum purchase.
All CDs offered are Book Entry only, meaning no certificates will be issued. All CDs are registered with the Depository Trust Company (DTC).
At Scottrade, CDs will not be automatically renewed or rolled over, and interest on the CD will not continue to accrue after maturity. Interest will be credited to your account on the payment date or the next business day. Interest is calculated on the basis of the actual number of days elapsed over a 365 day year. CDs pay out simple interest and interest does not compound. On the maturity date, the principal amount will be credited to the account.
Brokered CDs are CDs issued by banks that are made available to the customers of a broker/dealer or brokerage like Scottrade. The CDs are registered with the Securities and Exchange Commission. Brokered CDs are obligations of the bank, not the broker/dealer. Brokered CDs generally have all the features of CDs available directly from banks, and are eligible for the same FDIC insurance.
Purchasing brokered CDs through Scottrade provides the potential for higher yield in two ways. With the ability to survey a wide range of issues, you can choose the highest rate available. Through access to a variety of payment structures, your income needs may be matched to the optimal type of CD for you.
At Scottrade, the best rates offered by banks across the U.S. are posted for each common maturity date. The lists are updated several times a day. CDs do "sell out" as there is a limited quantity issued. They can also be "closed out" by the underwriter prior to trade date.
New CDs generally are offered every Monday and are often sold out by Friday.
There are no fees to purchase any CD at Scottrade. The underwriting bank pays Scottrade a fee for offering the CDs to our customers.
There is no bank penalty for early withdrawal of your CD; however, the CD will be offered for sale on the secondary market and will be subject to market risk. The price you receive will depend on current market conditions, and may be higher or lower than the original purchase price.
For primary and secondary certificates of deposit (CDs) offered at Scottrade, you can review the financial strength rating assigned to each CD by the Kroll Bond Rating Agency (KBRA). A financial strength rating is a credit measurement used to assess the financial health of an institution and that institution's ability to meet any credit obligations. As an investor, you can use a CD's credit rating to make informed decisions about the potential risk associated with owning a CD from the rated institution.
In the financial strength rating scale outlined below, each rating is representative of the issuing institution's ability to meet its credit obligations under severe economic, financial and business conditions.
CFairly likely but susceptible to adverse change
ELikely to have financial problems
NBNew institution, less than three years old, not rated
NTNew savings & loan, less than three years old, not rated
NRAtypical bank, bank holding company, savings & loan, or an institution missing key financial data necessary for rating
With a rating of A through C, you may see plus (+) or minus (-) modifiers following the letter rating. In those cases, the modifiers are used to indicate an increased or decreased risk level within the rating category.
Account Positions & Settlement
Certificates of Deposit are purchased by Scottrade's Fixed Income Trading Desk. If the CUSIP (Committee on Uniform Securities Identification) is known, the CD will be posted to the account on the trade date. In the event a newly issued CD has not yet received a CUSIP, the trade will not be posted to the account until the CUSIP is known.
Settlement may take up to a week or greater. The trade will show in the account, but the money will not be debited until settlement date. Please make sure cash is in the account to cover the trade on settlement date. Funds reserved for settlement date on a CD trade will continue to earn interest at the prevailing Scottrade rate.
CD Order Status
To check the status of a CD order, follow the steps below from your Scottrade account:
1. Click on the "My Account" tab at the top of the page.
2. Click on "Order Status" down the left hand column of the page.
3. Click on "CDs & Bonds" tab.
4. Select "Certificate of Deposit" from the drop-down menu under Choose a Product.