Did you know that Vanguard Brokered CD rates are some of the highest that we've found in the market? If you're interested in mutual funds, ETFs, and brokerage accounts, or want to buy CDs, a Vanguard Brokered CD could be a good choice for you. Keep reading to find out more about Vanguard's CD offerings, and whether they might be a good fit for you.
Vanguard Brokered CD rates for June 2024
Rates as of June 7, 2024
APY = Annual Percentage Yield
Vanguard Brokered CD
MINIMUM DEPOSIT $1,000
| 3 Mo. APY | 6 Mo. APY | 9 Mo. APY | 1 Yr. APY | 1.5 Yr. APY | 2 Yr. APY | 3 Yr. APY | 4 Yr. APY | 5 Yr. APY | 7 Yr. APY | 10 Yr. APY |
|---|---|---|---|---|---|---|---|---|---|---|
| 5.35% | 5.25% | 5.35% | 5.40% | 5.40% | 5.35% | 5.35% | 5.25% | 5.35% | 5.25% | 5.25% |
Compare Vanguard Brokered CD rates
Rates as of June 7, 2024
| Bank & CD Offer | APY | Term | Min. Deposit | Next Steps |
|---|---|---|---|---|
Discover® Bank CD Member FDIC. | APY:4.70% | Term:1 Year | Min. Deposit:$2,500 | Open Account for Discover® Bank CD |
Western Alliance Bank CD | APY:5.25% | Term:1 Year | Min. Deposit:$1 | Open Account for |
Western Alliance Bank CD | APY:5.10% | Term:9 Months | Min. Deposit:$1 | Open Account for |
Overview of Vanguard Brokered CDs
Vanguard's competitive CD rates make it an appealing choice for people looking for low-risk, short-term cash investment strategies. While many CDs pay compound interest on a daily or monthly schedule, interest for brokered CDs is calculated on a simple basis at Vanguard, meaning that you will get a percentage of the interest multiplied by the principal amount owned.
| Minimum Deposit | $1,000 |
|---|---|
| Range of Term Lengths | 1 month - 10+ years |
| Compounding Schedule | Interest doesn't compound and is calculated on a simple basis |
| Early Withdrawal Penalty | Brokered CDs don't have early withdrawal penalties; to get out of your CD early you will have to sell it on the secondary market. You could potentially lose money depending on the value of the CD when you sell vs. when you initially purchased it. |
| Grace Period | Once your brokered CD reaches maturity, the settlement and interest become accessible as cash in your settlement fund. |
Data source: Vanguard
Vanguard Brokered CD pros and cons
Vanguard's CD offerings work a little differently than most of the others on our radar. Specifically, Vanguard offers brokered CDs, which means that Vanguard brokerage account customers can choose to put their money into CDs offered by certain banks directly through its platform.
There's a lot to like about Vanguard Brokered CDs, but there's no such thing as a financial product that is a great fit for everyone. Here are some of the pros and cons to keep in mind, followed by some of the important information you should consider when choosing the best CD for you.
Pros
- Lots of term lengths to choose from
- Ability to sell brokered CD on secondary market before maturity
- Ability to buy existing CDs
- FDIC insured
Cons
- Must open a Vanguard brokerage account
- Minimum deposit is $1,000
Some of the features of Vanguard Brokered CDs that may appeal to you include lots of options for term lengths, FDIC insurance, the ability to sell your CD on the secondary market before it reaches maturity, and extremely competitive rates.
Some of the CDs listed, especially those with long term lengths, are callable. The issuing bank can choose to redeem them and return customers' money at certain dates, while most are traditional CDs.
The main drawbacks are that you have to open a brokerage account with Vanguard to purchase a CD, and Vanguard requires an investment minimum of $1,000. If you want to make additional purchases, you must make them in increments of $1,000. If you don't have a ton of money to get started with, or you want to create a CD ladder, this minimum could be an issue for you
How much can you earn with a Vanguard Brokered CD?
CD rates can change over time depending on economic circ*mstances and the federal funds rate. However, once you open a CD account, banks can't adjust your CD rate. Knowing how much your interest rate will be for a set period can help you easily achieve short-term financial goals.
Keeping that in mind, here's a table showing what potential earnings could look like if you deposited $1,000 into a traditional CD.
The numbers in the table below may not be accurate to current APYs and are for example purposes only.
| Term | APY | Earnings |
|---|---|---|
| 1 month | 5.35% | $4.35 |
| 3 months | 5.35% | $13.11 |
| 6 months | 5.35% | $26.40 |
| 9 months | 5.40% | $40.23 |
| 1 year | 5.45% | $54.50 |
| 18 months | 5.45% | $82.85 |
| 2 years | 5.40% | $110.92 |
| 3 years | 5.25% | $165.91 |
| 4 years | 5.25% | $227.12 |
| 5 years | 5.30% | $294.62 |
| 7 years | 5.25% | $430.72 |
| 10+ years | 5.25% | $668.10+ |
Data source: Author's calculations.
Is a Vanguard Brokered CD safe?
Yes, a Vanguard Brokered CD is safe. Vanguard offers a wide range of FDIC-insured brokered CDs. If a bank fails, the government will back each CD for up to $250,000 per depositor per bank. However, there is always the risk of inflation, which means that you may earn a lower rate through your CDs than the rate of inflation.
How to open a Vanguard Brokered CD
You can open a Vanguard Brokered CD in just a few easy steps.
1. Open and fund an account
The first step is to open an account and add money from your bank. New account holders will need to add at least $1 to get started, and CDs require a minimum $1,000 deposit. If you're funding your account through an asset transfer, investment account fund exchange, or rollover, you can fund the account after you open it.
2. Choose a Vanguard CD
Go to "Buy and Sell" to select your Vanguard Brokered CD.
3. Select maturity term
Pick the length of time -- one month to 10+ years -- that you want to invest in your CD.
4. Choose your bank
Decide which bank you want to use to fund your purchase.
5. Enter your deposit amount
Select the amount (at least $1,000) that you want to invest in your CD.
6. Submit your purchase
Submit your CD purchase. You'll then need to either wait until term maturity to access your funds, or sell your brokered CD if you want cash before the term is up.
Who is a Vanguard Brokered CD right for?
A Vanguard Brokered CD is right for anyone who has at least $1,000 to invest and is looking for a large selection of brokered CDs with a high interest rate.
Other Vanguard CD accounts
Vanguard also offers the following CD accounts:
- Secondary CD purchases from other investors.
Bottom line: Vanguard Brokered CD rates
Vanguard Brokered CD
- 3 APY: 5.35%
- 6 APY: 5.25%
- 9 APY: 5.35%
- 12 APY: 5.40%
- 18 APY: 5.40%
- 24 APY: 5.35%
- 36 APY: 5.35%
- 48 APY: 5.25%
- 60 APY: 5.35%
- 84 APY: 5.25%
- 120 APY: 5.25%
Show All Rates [+]Hide All Rates [-]
Rates as of June 7, 2024
APY = Annual Percentage Yield
Term
Vanguard Brokered CD
3 Mo.
6 Mo.
9 Mo.
1 Yr.
1.5 Yr.
2 Yr.
3 Yr.
4 Yr.
5 Yr.
7 Yr.
10 Yr.
5.35%
5.25%
5.35%
5.40%
5.40%
5.35%
5.35%
5.25%
5.35%
5.25%
5.25%
Keep reading about Vanguard
- Vanguard Cash Plus Account Review
- Vanguard Review
- Vanguard Digital Advisor® Review
Review sources
Our CDs methodology
At The Motley Fool Ascent, certificates of deposit (CDs) are rated on a scale of one to five stars, primarily focusing on annual percentage yield (APY) and early withdrawal penalty fees. Our highest-rated CDs generally include competitive APYs without complex qualification tiers, low withdrawal fees, reliable brand trust and reputation, and ease of use.
Learn more about how The Motley Fool Ascent rates bank accounts.
FAQs
The minimum deposit for a Vanguard Brokered CD is $1,000.
Fees for Vanguard Brokered CDs include:
- $1 transaction fee for each $1,000 CD ($250 fee maximum)
- $25 broker-assisted fee for any secondary trades made over the phone
The only way to cash out a Vanguard Brokered CD before it matures is to sell it on the secondary market.
