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What is Brokered Deposit?

Brokered Deposit

A deposit purchased from a broker that acts as the agent for the depositor. Brokered deposits usually apply to large deposits with a certificate of deposit included. The broker pools these certificate of deposits and bargains them to financial institutions so that they can negotiate for a higher rate. Brokered deposits are sold by banks to the broker who then divides the amount to smaller pieces for purchase. Under-capitalized banks are not allowed to accept brokered deposits.

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