Be Wary of a 'Registered' CD Broker.

There's a bad business going around. People who advertise themselves as "registered CD brokers" are mis-selling certificates of deposit to trusting savers.

CDs are insured by the Federal Deposit Insurance Corp., so you assume that your money is safe. The brokers advertise it at a higher interest rate than you'd get from banks.

Higher-rate CDs can be legitimate, as long as all their angles are disclosed. But the bad CD deals are devastating the hopes of careful savers who didn't intend to put their money at risk.

Many brokers have been advertising that they're "registered with the FDIC." That makes it sound as if they're government approved. In fact, registration doesn't mean a thing.

In 1991, Congress passed a law requiring brokers who sell insured CDs to notify the FDIC. The idea was to help the FDIC find all the account holders when a bank failed.

The brokers merely sent in their names. The FDIC didn't check them, license them, regulate them, insure them, endorse them, curb them or approve their ads.

For deceptive brokers, this law was a golden gift. They could advertise, truly, that they were on an FDIC list. The public had no idea that the list was entirely hollow. It sounded as if the brokers were government approved.

Finally, the FDIC asked Congress to repeal the law. Congress did so at year's end.

Deceptive brokers may take huge commissions out of your investment without telling you.

The broker can sell your callable or discount CDs on the open market, before maturity. You may be told that there's no early withdrawal penalty. But you generally lose money on an early sale -- often, a lot of money.

You should get written contract -- one you can take away and read before you sign. The contract should give you a specific "maturity date."