Quote:
Originally Posted by Michael G.
So, for simple CD's or savings accounts with Fidelity or Vanguard, is there
commissions you pay to use their services?
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There are no commissions to buy brokered CDs from Fidelity or Vanguard. There are two main differences between buying a CD from a bank or a broker. When you cash in a bank CD early, you will pay a fixed penalty, but you will still get your face value. With a broker, you can sell the CD early with no penalty, but you will get the current market value, which could be more or less than the face value. But, if you keep the CD until maturity, there are basically no differences. With the brokered CDs, you have access to hundreds of CDs instead of being stuck with the few CDs offered by a single bank. I stopped buying CDs from banks many years ago.
Note that Fidelity and Vanguard are currently offering money market accounts that are paying over 5 percent with total liquidity. Better than most bank savings accounts.