In looking at my brokerage account for fixed income products, I was looking at both CDs and Corporate Bonds. I was surprised to see that the best 1-year CDs had a higher interest rate than any AAA or AA bonds. (A was slightly higher than the best 1-year CDs).
Why would somebody buy a corporate bond with a lower interest rate over a CD that is FDIC insured?
My money would be locked up in both, but I could sell both on the secondary market if I needed the money early. I'm guessing it's easier to find buyers for a corporate bond on the secondary market, so I could probably get a better price. Could that be a reason why these bond rates are slightly lower?