CD frequently asked questions

A CD is a savings account with a fixed term. You agree to leave a lump sum with a bank or credit union for a set period — anywhere from a few months to several years — and in return the institution pays interest at a rate stated up front. Unlike a regular savings account, the rate on a standard CD does not change during the term.

The term starts on the day your deposit is credited (for brokered CDs, the settlement date) and ends on the maturity date. On that date you can withdraw your principal and interest, move it elsewhere, or let it renew. Most banks give you a short grace period, often 7 to 10 days, to decide before an automatic renewal locks the money in again.

APY stands for annual percentage yield. It shows what you would earn over one year, including the effect of compounding, so you can compare CDs on equal footing. Banks are required to quote it under the federal Truth in Savings rules. Keep in mind that a CD shorter than a year earns only a fraction of the annual figure over its life — a 6-month CD at 4.00% APY earns roughly 2% on your money by maturity.

No. APY is an annualized measure of return. Payment frequency is simply when interest lands — it might be credited monthly, quarterly, twice a year, or all at once at maturity. Two CDs with the same APY can pay you on very different schedules, which matters if you rely on the interest as income.

You receive your principal plus the interest earned. With a bank or credit union CD, the account usually renews automatically for a similar term at whatever rate the institution is offering then, unless you give instructions during the grace period. Brokered CDs normally do not renew; the money returns to your brokerage account as cash.

Usually, but it costs you. Most CDs charge an early withdrawal penalty measured in days or months of interest, and on some CDs the penalty can eat into principal. Federal rules require a penalty of at least seven days’ simple interest if you withdraw within the first six days, and beyond that each institution sets its own penalty. No-penalty CDs are the exception. See our guide to early withdrawal penalties.

CD interest is generally taxed as ordinary income at the federal level and, in most states, at the state level too. It is typically taxable in the year it is credited to your account, even if you leave it in the CD. Institutions send Form 1099-INT when you earn $10 or more. CDs held in an IRA follow the IRA’s tax rules instead. A tax professional can tell you how this applies to you.

Online banks and many credit unions have lower overhead and often use CD specials to attract deposits, so they tend to pay far more than the national average. Some large branch banks pay well under 1% APY on standard CDs. That gap is why comparing before you renew can make a real difference.

We review the full table regularly and keep a dated source record for every listing. The display date on each listing is simply today’s date (U.S. Eastern Time) — it isn’t the date a rate was last verified. Rates can change daily, so treat every figure as a starting point and confirm it with the institution before you open an account. Our rate methodology explains the process.

Not automatically. Check that the term matches when you will need the money, that you can meet the minimum deposit, what the early withdrawal penalty is, whether you must join a credit union, and that your total deposits at that institution stay within insurance limits. A slightly lower APY that fits your timeline is usually the better choice.

Longer terms lock in a rate for more time, which helps if rates fall, but they tie up your money and usually carry larger penalties. Shorter terms keep you flexible. Today the gap between short and long terms is small, so many savers match the term to a specific date or spread money across several terms with a CD ladder.

A brokered CD is issued by a bank but bought and held through a brokerage account at a major brokerage firm. Because one brokerage lists CDs from many banks, you can compare and buy CDs from several issuers without opening a separate account at each bank.

Brokered CDs issued by FDIC-insured banks are generally eligible for FDIC coverage up to the standard limits, provided the brokerage keeps proper records of who owns each deposit. Coverage is counted together with any other deposits you hold at the same issuing bank. The brokerage itself is not an FDIC-insured bank.

A non-callable CD cannot be redeemed early by the issuing bank, so you know the maturity date and the rate you’ll earn for the full term. A callable CD lets the bank end it early — typically when rates have fallen — which leaves you reinvesting at lower rates. Always check whether a brokered CD is callable before buying.

Brokered CDs generally don’t have a bank early withdrawal penalty. Instead, you can try to sell the CD on the secondary market through your brokerage. The price depends on interest rates at the time and may be less than you paid, and a buyer is not guaranteed. Many brokered CDs do allow heirs to redeem at face value if the owner dies (a “survivor’s option”).

Yes. You need an approved brokerage account before you can purchase a brokered CD. Opening one is usually free at major firms, but the application must be reviewed and funded first. Read our brokered CD considerations before you start.

Deposits at FDIC-insured banks, including CDs, are covered up to $250,000 per depositor, per insured bank, for each ownership category (such as individual, joint, or certain retirement accounts). Coverage combines all your deposits in the same category at the same bank — so a CD and a savings account at one bank share the same limit.

Yes. Share certificates at federally insured credit unions are covered by the National Credit Union Share Insurance Fund, administered by the NCUA, with the same $250,000 standard limit per member, per insured credit union, per ownership category.

You can spread deposits across different insured institutions, use different ownership categories (for example, individual and joint accounts), or buy brokered CDs from several issuing banks through one brokerage. Each strategy has rules, so check the FDIC’s or NCUA’s coverage estimators. Our insurance guide walks through the basics.

No. We are an informational comparison and marketing website. We don’t issue CDs, open accounts, hold money, carry out transactions, or give personalized financial advice.

No. A request simply tells us what you’re looking for so we can respond. Rates are set by each institution and are only secured when you open and fund an account directly with that institution under its terms.

A phone number is required so we can confirm the details of your request and follow up with the institution details for the CDs you asked about. You may also choose, with a separate optional checkbox, to allow participating providers to call or text you about CD options. Leaving that box unchecked doesn’t stop you from submitting.

Listings show the APY, term, minimum deposit, institution type, insurance and source type, so you can compare on the terms that matter. Institution names aren’t published on the site. When you inquire about a listing, we follow up with you directly with the institution details and full terms. Inquiring is free and doesn’t commit you to anything.

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