Understanding the Risks of Callable CDs

Reported about 7 hours ago

In a recent discussion, strategist Cooper Howard from Schwab Center for Financial Research emphasized the conservative nature of Certificates of Deposit (CDs), noting their FDIC insurance and high credit quality. However, he warned about the potential risks associated with callable CDs, which allow banks to redeem them earlier than expected, potentially cutting short investors' earnings. Howard highlighted the importance of understanding these risks, especially as the Federal Reserve begins a cycle of interest rate cuts.

Source: YAHOO

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