News Release

FINRA Issues New Investor Alert, High-Yield CDs: Red Flags That Signal a Scam

WASHINGTON—The Financial Industry Regulatory Authority (FINRA) issued a new investor alert called High-Yield CDs: Red Flags That Signal a Scam warning investors to be wary of promotions touting certificates of deposit (CDs) that promise interest rates that are substantially higher than current averages. In one instance of suspected email fraud, the pitch appeared to come from a large U.S. bank that supposedly was promoting a CD offered by an international banking partner. At a time when most CDs at U.S. banks and credit unions were offering just over 1 percent for a comparable term, this pitch offered a CD with a 15 percent yield, and contained instructions on how to wire funds.

"Savers continue to face near-historic low yields on traditional bank products. Fraudsters attempt to take advantage of investor desire for higher yields by luring them into potentially fraudulent CDs that promise both safety and double-digit returns," said Gerri Walsh, FINRA's Senior Vice President for Investor Education.

FINRA's new investor alert provides consumers with "red flags" that indicate a CD offer may be fraudulent, including:

  • interest rates that are significantly higher than average;
  • emails with addresses that are not originated and sent by the financial institution that is cited in the promotion;
  • emails that contain misspellings or grammatical errors;
  • promotions that claim to be from a U.S. financial institution that has aligned with an international bank;
  • promotions that claim to be for a "limited time only"; and
  • promotions that claim to be directed at "best customers" and that require extremely high minimum investments (for example, $100,000).

High-Yield CDs advises investors who believes they have been a victim of a CD scam to contact their financial institution immediately to report a loss or theft of funds through an electronic funds transfer.

FINRA, the Financial Industry Regulatory Authority, is the largest independent regulator for all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, informing and educating the investing public, providing trade reporting and other industry utilities, and administering the largest dispute resolution forum for investors and firms. For more information, please visit