Answers About CDs
Federally Insured Savings Network (FISN) is an investment advisory service based in the Washington, D.C. suburb of Bethesda, MD., that specializes in the placement of Certificates of Deposit (CDs). FISN's objective is to identify those federally insured institutions whose CDs pay the highest interest rates. We then recommend for CD investment, only those banks and thrifts that qualify as the safest and most convenient. Below, for your information, we answer some commonly asked questions about our CD service.

Call us with your questions. 800-351-4494

Questions Answered Below

What is a CD?
Why invest in a CD?
How safe is my money in a CD?
Why not invest in my bank's CDs?
Is FISN a bank?
Why trust FISN?
Why use Federally Insured Savings Network?
Can I do it myself?
How does it work? 
What is the process to purchasing a CD?
What is a Callable CD?
What is a Callable, Multi-Step, or Bonus Rate CD?
Who can call a Callable CD?
Can I call a Callable CD?
What Does This Service Cost?
What are your fees?
How does the Current CD Rate differ from the Theoretical APY?
What is the difference between APY and the average annual yield?
Are IRAs available to hold these CDs?

Why invest in a CD?
FDIC insured CDs are safe as a U.S. Government security, but they pay much higher rates - higher than Treasury bills and notes, as well as more risky commercial paper. CDs have paid higher rates of interest than other short term alternative investments of comparable credit quality since FISN began tracking them in 1983. CDs give you the ability to select exact maturity dates to correspond with future cash needs. Unlike many other investments, funds invested in CDs earn interest every day, avoiding lost days because of complex settlement practices that are normal with securities. top

How safe is my money in a CD?
Provided that your investment falls beneath the FDIC set limit, you are guaranteed a return of your deposit. To ensure the safety of our client's money FISN only places CDs with banks that are FDIC insured. The FDIC covers individual accounts up to $100,000 and joint accounts up to $100,000 per individual. FDIC insured CDs are backed by the full faith of the US Government. top

Why not invest in my bank's CDs?
You should certainly ask your bank about its CD rates. You will probably find, however, that their rates are much lower than those offered through Federally Insured Savings Network. Most institutions want your funds in a no interest or low interest checking account instead of earning high interest rates. Also, FISN has no practical limit on federal deposit insurance within its network of hundreds of banking institutions, while any one bank or thrift can provide only $100,000 in insurance per depositor. When there is more than $100,000 available for CD Investment, FISN helps spread deposit funds around to the top paying banks at no more than $100,000 per institution to keep all funds insured. top

Is FISN a bank?
No, FISN is not a bank. We search the nation for the banks with the highest CD rates. FISN sets up the CD at the bank you choose, handling the paper work and arranging the transfer of funds into the institution. top

Why trust FISN?
FISN can be found on the internet but operates in a tradtional manner outside the internet. Located in the Washington, DC suburb of Bethesda, MD, FISN has been serving customers since 1983, investing billions of dollars for individuals, corporations and associations. The internet is the best way for us to be found by potential clients and to display our daily rate changes. top

Click on the Verify button to check on FISN with any of the regulatory agencies that monitor the securities industry - we are proud of our record. top

Why use Federally Insured Savings Network?
CD issuers in our network pay the highest rates in the nation and are qualified for safety. Our staff will carefully service your CDs, make sure your CDs are set up properly to meet insurance requirements, closely follow all wire transfers and confirm all transactions with you by telephone and mail. We also continually monitor the safety of each institution. All the services you expect from an expert. top

Can I do it myself?
Perhaps, but if you have a large CD portfolio you might have to make it a full­time job, hire an experienced financial staff to help you, install toll free lines, and design computer reports to help you track your CDs and their interest payments. But you will only identify comparable CD issuers that Federally Insured Savings Network would have recommended, at the expense of your time and telephone bill. And you still won't have the CD Management Reports and a CD account executive that FISN provides. Also, FISN has spent 24 years developing relationships with institutions that often gets us higher rates. top

How does it work? What is the process?
You tell us what amount and maturities you prefer. We will quote terms for each Jumbo CD, normally in the amount of $99,000, so that the interest and principal are both insured. We will provide you with wire instructions which you give to your bank. Your bank sends the funds directly by Federal Reserve wire to each CD issuer for same day credit, keeping the funds secure in the protected banking system. We inform each institution that the funds have been assigned to them and fully register you as the CD owner. top

The FISN staff follows the full transaction to assure proper crediting and no lost interest income to you. The CD issuer sends the CD or a custody receipt directly to you. All interest checks and statements are always mailed directly to the registered owner. FISN will send you two notices in advance of upcoming maturities and call you on the day of maturity to offer the best re-investment opportunities or to arrange the wire back on the same day of your funds to your bank.  top

What is a Callable CD?
Callable CDs pay interest to the depositor at the contractual rate of interest over the life of the CD. In all cases, the CDs have a period of time during which they are non callable. This means the issuing bank cannot cut short the CD and give back the deposit. At the end of the non callable period, usually one or two years from the issue date, the CDs may be called or redeemed for the full amount of the original deposit. There is no simple way to predict when a call will occur. However, when interest rates decline, the probability of a fixed rate deposit being called increases significantly. Conversely, when interest rates rise, it is usually less certain that such a deposit will be called by the issuer. Only the issuer and not the depositor may call a CD. If the CD is not called, the CD will continue to pay interest until the next call date. Issuers normally announce the exercise of their call privilege in advance. top

What is a Callable, Multi-Step, or Bonus Rate CD?
Callable, Multi-Step CDs are Certificates of Deposit whose interest rates increase or decrease over the life of the CD on a predetermined schedule. There are two types of Multi-Step, or Bonus Rate CDs. Step Up Bonus Rate CDs are Callable, Multi-Step CDs in which the interest rate increases over the life of the CD to a high, or bonus, ending rate of interest. Step Down Bonus Rate CDs are Callable, Multi-Step CDs in which the interest rate decreases from a high, or bonus, beginning rate to lower rates over the life of the CD. In all cases, Multi-Step CDs have a period of time which they are non callable. At the end of the non callable period, usually one or two years from the issue date, the CDs may be called or redeemed for the amount of the original deposit. If the CDs are not called or cut short, the issuer must pay the new interest rate for the next non call period. The CDs are usually callable on each subsequent interest payment date. Like a fixed rate callable CD, it is difficult to project when a CD might be called. Business sense would usually indicate that if interest rates rise, a Step Up  Bonus Rate CD will less likely be called. And conversely, when interest rates fall, Step Down Bonus Rate CDs will less likely be called. Only the issuer and not the depositor may call a CD. Issuers normally announce the exercise of their call privilege in advance. top

Who can call a Callable CD?
Only the bank can call a "Callable CD". The  CD investor has in effect, sold the right to call the CD to the bank. The bank's right to call the CD has considerable value. Thus, the bank issuing the CD pays the investor a higher interest rate than he would receive purchasing a non-callable CD in exchange for this right to call the issue. top

What does this service cost? What are your fees?
FISN surveys interest rates nationwide among thousands of federally insured institutions to find the highest rates for our clients. This service is at no direct cost to you if you accept a CD placement to an institution that customarily pays fees to FISN for the placement. If better rates, net of our fee of 0.25%, are available at other comparably safe institutions, we will also recommend institutions that do not pay any fees. These other institutions simply pay high interest rates. If you accept this other type of placement, you will be obliged to pay the standard fee of 0.25% per annum. We suggest you compare the net returns and select what maximizes your wealth. top

For those CDs where paying a fee will earn you a higher net rate we will quote both the gross CD rate and the net CD rate, e.g., 7% gross and 6.75% net after the O.25% fee is subtracted. In actual dollars the fee varies depending upon the length of the CD term and the amount of the CD, with typical charges ranging from $20.55 for a 30 day CD term and $123.29 for a 180 day CD term in the amount of $100,000.00. FISN invoices once per month for all CDs placed in that calendar month with payment due in 15 days. top

How does the Current CD Rate differ from the Theoretical APY?
All certificates of deposit (CDs) earn a rate of interest. It is the contractual rate of interest the issuer agrees to pay for the time of deposit. This interest rate can be paid out periodically, such as monthly, or it can be paid at maturity. The CD rates that FISN posts on its CD web site are representative of the best CD rates for each term we see in the market when the table was last updated. We label them on our table as the Current CD Rates. They don't necessarily relate to any one institution’s rates. There could be one or many issuers paying the top rate. And, the CD market is changing all the time. 

For comparison purposes we also post to the web site an indication of the APY (Annual Percentage Yield) associated with a typical CD for that term and type. Since all institutions have different interest payment practices we simply assume that the best rates are compounded at a standard frequency of interest payment (typically monthly or semi-annually) for comparison purposes. It is a "theoretical" or “hypothetical” computation using the representative best interest rate. We label it on our table as the Theoretical APY. Whether you leave your interest to compound and what yield you would actually achieve depends upon many factors. We will explain these factors before you make a decision to place a CD through FISN. Most important is the compounding practice of the actual institution you chose, whether you receive periodic payments of interest, alternative reinvestment vehicles and the need to maintain FDIC insurance coverage throughout the life of the CD. Our goal is to match you with the institution that pays the best interest rate with terms that meet your needs. top

What is the difference between APY and the average annual yield?
There is significant difference between these terms. APY was established by the Board of Governors of Federal Reserve System for the uniform quotation of deposit interest rates. It is a standard dictated by the government designed to clarify deposit yields. Average annual yield is used by some brokers whose intent is to confuse CD investors. It is not a legitimate comparison figure. It distorts the actual yield expressed by the standard APY calculation. In fact, the longer the term of the CD the more it distorts the true picture. For these longer term CDs it gives the false appearance of a higher return. Brokers who quote average annual yields should be requested to supply the APY as well. FISN does not use average annual yield calculations. top
 

Are IRAs available to hold these CDs?
Yes,  CDs can be held in an IRA account. And FISN can establish IRAs for its clients as long as the minimums are met. Typically we are asked to transfer funds from an existing IRA to FISN IRA. Or, we are asked to accept funds from a pension plan into an IRA Rollover. In either case, you need to complete an IRA application that among other things determines the beneficiaries. Next we will need you to sign a transfer form and supply a current statement from the existing IRA administrator.  IRS rules dictate that trades can not be accepted in an IRA until the transfer is completed. top