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About CDs & FISN

What is FISN, Inc?
FISN, Inc. is an investment management firm that specializes in conservative fixed income products. The firm seeks out consistent, above average results with below average risks through its two operating divisions: Federally Insured Savings Network and First Internet Securities Network. FISN is located in Bethesda, MD, an adjacent Washington, D.C. suburb. FISN was founded and started placing CD investments in 1983. It is now in its 27th year.

What is Federally Insured Savings Network?
Federally Insured Savings Network is the market survey and online publication division of FISN, Inc. It searches FDIC insured certificates of deposit (CDs), CD Alternatives and Bonds from across the nation to find the best investment opportunities that meet customer needs for safety and yield. It publishes daily the best yields available online at www.fisn.com. Federally Insured Savings Network is the oldest CD investment firm in the US, having started in 1983.

What is First Internet Securities Network?
First Internet Securities Network is the securities division of FISN, Inc. It is a registered securities broker dealer. FISN, Inc. is registered with United States Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), a national self-regulatory membership organization previously known as the NASD, and in all 50 of the states and the District of Columbia. FISN became registered in the 1987.

What does Federally Insured Savings Network do?
This division specializes in FDIC insured Jumbo CDs in addition to its market survey and publication responsibilities. Jumbo CDs are placed directly at banks where CD accounts are individually opened at each bank offering the best rates and terms. Funds and interest are transferred directly between the account owner and the bank. A securities brokerage account is not needed for direct CD transactions or to hold direct CD investments.

What does First Internet Securities Network do?
First Internet Securities Network is an investment broker dealer that specializes in conservative fixed income investments. These investments include CDs and a wide range of fixed income alternatives and bonds. Investors open a securities account where funds are managed, transactions are made and securities are held. CDs held at a broker dealer enjoy the same FDIC insurance rights as those held directly at a bank.

Where can I find more about FISN Inc.?
Check out the FISN online Brochure on the Verify page.

How do I open a new account at First Internet Securities Network?
Call during Washington, DC business hours so that an Account Executive can help you with your questions and the completion of the new account application. You can also open an account online or use a traditional paper new account form which is mailed to FISN. Go to the Getting Started section at the top of the page and follow the directions there.  

What does a FISN broker do for me?

1. Opens, approves and monitors your account by obtaining, verifying and retaining your account information and documents.
2. Provides investment recommendations suitable for you.
3. Accepts orders and other instructions from you regarding your account, and promptly and accurately transmits those orders and instructions to FISN's clearing and execution firm.
4. Operates in compliance with all applicable laws, rules and regulations relating to activities within your account.
5. Maintains the required books and records.
6. Investigates and responds to any question you have about your account.

Is my securities account insured or protected?

1. Securities in FISN accounts carried by National Financial Services LLC (NFS), a Fidelity Investments company, are protected in accordance with the Securities Investor Protection Corporation (SIPC) up to $500,000 (including cash claims limited to $100,000). For details, please see www.sipc.org.

   NFS has arranged for additional excess SIPC protection of up to $1 billion from Lloyd's of London for cash and covered securities to supplement its SIPC coverage. Neither SIPC nor excess SIPC coverage protects against a decline in market value of securities. The Lloyd's of London coverage is only utilized when SIPC coverage is exhausted. See the NFS brochure - A Guide to Your Brokerage Account.

   Note: Certain items are not eligible for SIPC protection. Among the assets typically not eligible for SIPC protection are commodity futures contracts, currency, and precious metals, as well as investment contracts (such as limited partnerships) and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.

2. The securities account is not FDIC insured like a bank deposit account. CD investments held in the account are FDIC insured according to the rules of the FDIC. Non CD investments do not have FDIC coverage.  

What is the role of National Financial Services LLC?
FISN has entered into an agreement with National Financial Services LLC (NFS) to provide certain back office functions. NFS is a Boston based, Fidelity Investments company and a nationwide leader in securities administration.

NFS is responsible for the following functions at the direction of FISN:

1. Execution, clearance and settlement of securities transactions.
2. Preparation and distribution of periodic statements of securities accounts, transaction confirmations and tax documents.
3. Custody and safekeeping of funds and securities in customer accounts.
4. Receipt and delivery of funds and securities in customer accounts.
5. Extension of margin credit.
6. Maintaining required books and records.

Are First Internet Securities Network and FISN, Inc. registered with the Securities Exchange Commission and other regulatory agencies?
Yes, FISN and its broker dealer are fully registered with all the appropriate federal and state regulators. Click here to Verify our registration with any of the applicable regulatory groups.

What do you charge for commissions and other fees?
Commissions are not typically charged on fixed income transactions at a broker dealer. The firm earns a sales credit from the issuer and/or sells investments net to the buyer without any charges.

Accounts held at First Internet Securities Network have a set of administrative fees and commission charges for stock transactions. Administrative Fees are listed and explained on the Fees page in the Notices section link at the bottom of the home page.

Placement Fees for direct Jumbo CDs placed through Federally Insured Savings Network are 0.25% per annum and are more fully explained below. Ask your broker about stock commissions which depend upon whether you trade online yourself at myStreetscape or ask the broker to help.

Stock commissions start at 10 ¢ per share with a minimum of $50 per trade for online trades. Stock commissions using a broker for assistance depend upon how much research and analysis is requested.

Mutual fund sales and purchases have a $50 fee per transaction, whether done online or broker assisted.

What is myStreetscape®?
myStreetscape® is an internet-based system developed for the individual investor to help manage their entire portfolio from a home or office computer via the internet 24 hours a day, 7 days a week. Investors can view their account online including recent confirmations, statements and tax reports. Stock and mutual fund transactions can be entered online for execution during business hours.

How do I get a myStreetscape® account?

1. You must hold a FISN securities account.
2. Request a sign-on user name & temporary password as either a view only account or a full-trading for equities and mutual funds customer.
3. Logon and enter the temporary password. Then change the password to a personal one that only you know.
4. Read the agreements and accept the terms.
5. You are now activated.

What is a CD?
A Certificate of Deposit (CD) is a contract with a bank to pay a contractual rate of interest over a specified period of time. FISN recommends only CDs at or below the insurance limit of $250,000 (FDIC limit through 12/31/2013), which pay the highest interest rates and are issued by federally insured banks. All insured banks are regulated by the U.S. Government, periodically examined and annually audited by independent accountants.

Why invest in a CD?
FDIC insured CDs are as safe an investment as a U.S. Government security, but they pay much higher rates - higher than Treasury bills and notes, and the 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. Direct CDs give you the ability to select exact maturity dates to correspond with future cash needs. Funds invested in direct CDs earn interest every day from the day of deposit to the desired maturity date.

How safe is my money in a CD?
Provided that your investment falls beneath the FDIC set limit of $250,000 (FDIC limit through 12/31/2013) and FDIC rules are met, 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 $250,000 (FDIC limit through 12/31/2013) and joint accounts up to $250,000 (FDIC limit through 12/31/2013) per individual per bank. IRA accounts are insured up to $250,000 per bank. Multiple banks are used to extend coverage. FDIC insured CDs are backed by the full faith of the U. S. Government. In 2008 the FDIC expanded the FDIC insurance level per account temporarily to $250,000. This expanded insurance program is designed to last until the end of 2013 unless it is renewed. All the previous rules designed for the $100,000 insurance level are temporarily applicable to the $250,000 FDIC insurance level.

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 a low-interest checking account, instead of earning high interest rates. 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 $250,000 in insurance per depositor. When there is more than $250,000 available for CD investment, FISN helps spread deposit funds around to the top paying banks, at no more than $250,000 per insured institution, to keep all funds insured.

Is FISN a bank?
No, FISN is not a bank and does not issue CDs. FISN is not insured, but, the deposits of its customers, invested in FDIC insured CDs, are. FISN searches the nation for the banks with the highest CD rates and suitable terms. CD investments and alternatives are held at the FISN broker dealer or directly at banks. FISN sets up the direct CDs at the banks you choose, handling the paper work and arranging the transfer of funds into the institution.

Why trust FISN?
FISN can be found on the internet but operates in a traditional manner, person to person and on the telephone from its offices located in the adjacent Washington, DC suburb of Bethesda, MD. FISN has been serving CD investors 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 publish our daily rate offerings.

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.

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 established properly to meet insurance requirements, closely follow all wire transfers and confirm all transactions with you by telephone and mail - all the services you expect from an expert.

Can I do it myself?
Perhaps, but if you have a large CD portfolio you might have to make it a full-­time 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 the CD Account Executive that FISN provides. Also, FISN has spent 26 years developing relationships in the market place that often gets it higher rates.

How does it work? What is the process?
You tell us what amount and maturities you prefer. We will quote terms for each CD, normally in the amount of $99,000, so that the interest and principal are both FDIC insured. Together we make a decision to invest in CDs held in a FISN brokerage account or directly at each bank. In either case, 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 or to your FISN brokerage account held at National Financial Services. CDs are purchased in the brokerage account for you or we inform each bank that direct CD funds have been assigned to them and fully register you as the CD owner.

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 the CD is not 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.

What is a Callable, Step-Up or Bonus Rate CD?
Callable, Step-Up CDs are Certificates of Deposit whose interest rates increase over the life of the CD on a predetermined schedule. Step-Up, Bonus Rate CDs are callable, multi-step CDs in which the interest rate increases over the life of the CD to a higher, or bonus, ending rate of interest. Step-Up CDs have a period of time for 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 higher 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. Only the issuer and not the depositor may call a CD. Issuers normally announce the exercise of their call privilege in advance.

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 from investing in a non-callable CD, in exchange for this right to call the issue.

What are the service fees for investing in Direct Jumbo CDs?
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.

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 $123.29 for a 180 day CD term and $250.00 for a 1 year CD term for a CD 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.

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 that 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 just 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 each 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, the yield on 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.  

What is the difference between Annual Percentage Yield (APY) and the average annual yield?
There is significant difference between these terms. The APY calculation formula was established by the Board of Governors of the Federal Reserve System for the uniform quotation of deposit interest rates and yields. 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 and exaggerated 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.

Are IRAs available to hold CDs?
Yes, CDs can be held in an IRA account. FISN can establish IRAs for its clients as long as the minimum investment amounts per transaction are met. FISN only accepts IRA accounts at the FISN broker dealer, First Internet Securities Network. Typically we are asked to transfer funds from an existing IRA to a FISN IRA. Or, we are asked to accept funds from a 401k plan or 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.