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Image description: When it comes to budgeting and debt, 61 percent of U.S. adults admit to not having a budget, and one-third of U.S. adults indicated their household carries credit card debt from month-to-month.
Learn more about American trends with personal finance from the 2014 Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling.

Image description: When it comes to budgeting and debt, 61 percent of U.S. adults admit to not having a budget, and one-third of U.S. adults indicated their household carries credit card debt from month-to-month.

Learn more about American trends with personal finance from the 2014 Consumer Financial Literacy Survey conducted by the National Foundation for Credit Counseling.

When a Broker Offers a Bank CD: It Pays to Do Some Research

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From the FDIC

A certificate of deposit account (CD) at an FDIC-insured bank is one of the safest, most reliable investments available because it provides a predetermined fixed- or variable-rate interest computation for a set time period (usually three months to five years) and deposit insurance protection of up to at least $250,000 per depositor.

Recently, you may have seen or received advertisements from deposit brokers offering FDIC-insured CDs. While using deposit brokers has grown in popularity because brokers often can negotiate higher interest rates, the CDs they sell may involve more risks than working directly with an insured bank.

FDIC Consumer News has previously cautioned readers to be careful when buying CDs from third parties, but given the increased consumer interest and ongoing reports of complaints, we offer our latest tips and information:

  • Use a reputable deposit broker.

  • Be skeptical if the interest rate on a brokered CD is significantly higher than other advertised rates.

  • Make sure all of your deposit will be fully insured.

  • Learn whether your only option to withdraw early from a brokered CD is to sell it.

Get more tips and advice and learn what to do if you have a problem with your CD from the FDIC.

 

Ask these questions before diving in: 

What Should a Smart Investor do When Hiring an Advisor?

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By Michael Herndon, Consumer Outreach Officer for the Commodity Futures Trading Commission (CFTC).

Even seasoned investors sometimes miss out on doing a few things that will serve them well when working with an advisor. They usually interview the potential advisor to ask about how they have performed in the past, but too often investors don’t verify the advisor’s background or registration status with a government agency.

It is absolutely essential to check an advisor’s past record to make sure they are clear of violations and other problems. If you ask advisors if they are legitimate, of course they will tell you yes, and that they are registered as required. However, with a few quick phone calls or Internet searches you can confirm that information for yourself.

For individuals under the CFTC’s jurisdiction, consumers can find information in the National Futures Association’s Background Affiliation Status Information Center database (BASIC).

For other investments, you can research brokers, brokerage firms, and investment advisors and firms with this free tool from the Financial Industry Regulatory Authority, FINRA’s BrokerCheck.

Also, just a simple call to see if the financial professional has a business license or even searching his or her name on an online search engine can help.

My advice is to always consult THREE independent sources for background information before you invest with anyone or conduct any financial transaction.