Overview | Process | FDIC Coverage | Step-Up CD Features | Callable CD Features | ID Requirements | Fees
Step-Up Bonus Rate Callable CDs are FDIC insured and are purchased at the FISN Division of Landolt Securities, Inc. a brokerage firm. The bank pays interest at a fixed rate for each period and then the rate steps-up to a new, higher rate of interest for the next period. Callable CDs generally offer higher rates than fixed rate CDs but in return for this the bank has the right to return the funds early. FDIC insured banks use brokerage firms to distribute their CDs nationwide. The FISN Division of Landolt Securities, Inc. has access to a wide inventory from most Wall Street firms and CD issuers. Investors can select the terms and steps they feel will meet their investment objectives. All CDs are held in a brokerage account. The banks do not issue physical certificates.
Investors open a standard brokerage account at the FISN Division of Landolt Securities, Inc. Accounts are held at National Financial Services LLC., which provides Clearing, Custody and Safekeeping services for Landolt Securities. A brokerage account may hold many different CDs. It is not necessary to open a new account for each CD purchase. If you already have an FISN brokerage account, you may purchase your CDs immediately. If you have opened a new account you need to fund the account by sending a fed funds wire or a check. Once funds have been received, you may begin purchasing securities.
The FISN Division of Landolt Securities, Inc. sends new account paperwork and any additional brokerage forms to the customer or they may be downloaded from our Form page. Paperwork is returned to the FISN Division of Landolt Securities, Inc. along with the required identification. See ID requirements below.
Confirmation of each securities trade and account statements are sent for each account to the investor from National Financial Services LLC on behalf of the FISN division of Landolt Securities
CDs are purchased in amounts starting at $25,000. No more than the $250,000 insurance limit per ownership category should be invested in any one bank at the same time to insure coverage of both principal and interest. There is no limit on the number of banks the can be purchased per brokerage account and accounts can be opened for other ownership categories such as joint or trust accounts. FDIC coverage for retirement accounts is $250,000 per bank and is separate from any FDIC insured accounts the owner may have with that bank. FISN can work with you to spread your funds over multiple FDIC insured banks and over multiple brokerage accounts (if you qualify) to keep your funds within insured limits.
STEP UP CD FEATURES
Step-Up CDs pay interest at a fixed rate for each period and then step-up to a new, higher rate of interest for the next period only if the CD is not called. Interest is paid periodically (usually on a semi-annual or monthly) basis into the brokerage account where it can continue to earn interest in a money market fund account. CDs are usually callable at each step-up point. Key information is the interest rate and dates for each step period.
Each CD has its own unique terms that establish the steps of the CD. Investors are advised to study the Terms & Conditions (Prospectus) of each offering and the Disclosure documents carefully in order to fully understand the steps and call features. Disclosures and Prospectus should be retained for future reference. Consult the RISKS tab for the advantages and disadvantages of a Step Up Rate CD.
CALLABLE CD FEATURES
Callable CDs have an initial non-callable term and a callable term. The interest rate was pre-determined at issue for each step-up period and the rate cannot change until the next step. The interest is paid into the brokerage account where it can continue to earn interest in a money market fund account. At the end of the non-callable period, the CDs may be called for the full amount of the deposit. When called, the bank returns the deposit amount to the brokerage account with full interest to date. If not called, the CD remains callable usually in connection with the next interest period. Only the issuing bank of each CD can make the call decision, not the depositor or the broker. The CD will continue to pay interest for the full term of the CD if it is never called. Key information is the name of the bank, the first call date, subsequent call dates and the final stated maturity at the end of the possible term.
Interest paid into the brokerage account via checks or electronic funds transmission straight to your local bank. You can set up a payment schedule called a "Custom Payment/Earning Plan. The form is available on the Forms page. Available cash also can be withdrawn from the account via checks, automatic teller machines or debit card. There may be fees for accounts with ATM or debit cards.
CDs are held in a Brokerage accounts at the FISN Division of Landolt Securities, Inc. Securities in Landolt Securities accounts are carried by National Financial Services LLC, Member NYSE/SIPC, a Fidelity Investments company which provides Clearing Custody and Safekeeping services.
The FISN Division of Landolt Securities, Inc. is required under the Patriot Act to verify the identity of individuals and entities. Individuals are required to provide a copy of a current government issued, photo identification. Business accounts, trusts and other non-individual accounts have special requirements. Ask your FISN Representative what documents will be required to open up a particular type of account.
Please note that some banks exclude residents of certain states from the purchase of their CDs. Your Representative may need to inquire about your state of residence.
There are no placement fees or commissions for the purchase of a CD. The issuing banks pay brokers to distribute their CDs nationwide. New issue CDs are sold at par or a price of 100.00 for each $100.00 of the CD. Par is the face amount of the CD on which interest is earned. Some CDs may require minimum purchase amounts. Your Representative may need to inquire about how much you wish to invest.