Common questions about brokered CDs, the IOI process, FDIC insurance, and how the CleverAlpha Securities platform works.
Brokered certificates of deposit (CDs) are time deposits issued by FDIC-insured banks and sold through a registered broker-dealer rather than directly by the issuing bank. Because they are sold in the secondary market through broker-dealers like CleverAlpha Securities, brokered CDs often offer higher yields than bank-direct CDs and allow access to a broader range of issuers and maturities.
An Indication of Interest (IOI) is a non-binding expression of intent to purchase a CD at a specified price and quantity. On this platform, you browse live offerings, select a CD, and submit an IOI specifying your desired par amount. CleverAlpha Securities then contacts the counterparty dealer on your behalf. You receive email confirmation of your IOI and status updates as the ticket progresses through our workflow: PENDING -> IOI_SENT -> FILLED or SOLD_OUT.
Yes. CDs offered on this platform are issued by FDIC-insured depository institutions. FDIC insurance covers up to $250,000 per depositor, per insured institution, per account ownership category. It is your responsibility to ensure aggregate deposits at any single institution stay within FDIC limits. CleverAlpha Securities is not a bank and does not guarantee deposits.
Minimum investment denominations vary by offering. Most brokered CDs have a minimum denomination of $1,000, with increments of $1,000 thereafter. Some structured notes or corporate CDs may have higher minimums (e.g., $5,000 or $10,000). The minimum denomination for each offering is displayed on the marketplace screen before you submit an IOI.
A callable CD gives the issuing bank the right to redeem (call) the CD before its stated maturity date, typically on specified call dates. If the issuer calls the CD, you receive your principal plus accrued interest up to the call date, but you no longer earn the original coupon rate going forward. Callable CDs generally offer a higher yield than non-callable CDs to compensate for this call risk. Non-callable CDs (NC) are identified as such in the offering details.
The yield curve chart displays the U.S. Treasury par yield curve sourced live from the U.S. Department of the Treasury. The x-axis shows maturity (from 1 month to 30 years). The y-axis shows the annualized yield in percent. CD offerings are plotted as data points against this curve so you can immediately see the spread -- how much additional yield the CD offers relative to the risk-free Treasury of the same maturity. A wider spread indicates more compensation for credit or call risk.
The UST (U.S. Treasury) par yield rate is the interest rate at which a U.S. Treasury security would trade at par (face value). It serves as the risk-free benchmark rate for fixed-income analysis. When evaluating a brokered CD, the spread over the comparable UST rate tells you how much extra yield you are earning for taking on bank credit risk (and call risk, if applicable). CleverAlpha Securities displays UST par rates from the U.S. Treasury website to help you make informed comparisons.
The spread is the difference between the CD's coupon/APY and the UST par yield for the nearest matching maturity. For example, if a 2-year CD yields 5.20% and the 2-year UST par rate is 4.75%, the spread is +45 basis points (bps). A positive spread means the CD is yielding more than the equivalent Treasury. This platform calculates and displays spreads automatically based on live UST data.
After you submit an IOI: (1) Your ticket is created in PENDING status and you receive an email confirmation. (2) Our team reviews your IOI and contacts the dealer counterparty -- your ticket moves to IOI_SENT. (3) If the offering is available at your requested terms, your ticket is marked FILLED and you receive a fill confirmation. (4) If the offering is exhausted, your ticket is marked SOLD_OUT. (5) After fill, your ticket moves to SETTLED once the trade settles. You can track your tickets and their event history in the My Tickets section of the platform.
Access to the CleverAlpha Securities CD Marketplace is restricted to authorized users: investment advisers at CleverAlpha Asset Management and affiliated entities, and accredited investors approved by CleverAlpha Securities. Account access is provisioned by CleverAlpha Securities administration. If you are an investment adviser interested in accessing this platform, please contact us at support@cleveralphasecurities.com.