Question 1

What is a CD?

Accepted Answer

A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time — such as 6 months, 1 year, or 5 years — usually at a fixed interest rate. In exchange for leaving the money untouched, banks typically pay more than standard savings accounts, though this isn't always the case.

Question 2

How do I compare CD rates?

Accepted Answer

Compare the APY for the same term, then look at the minimum deposit, early withdrawal penalty, what happens at maturity, compounding frequency, and whether the issuing institution is FDIC- or NCUA-insured. The highest APY isn't always the best fit if the penalty or term doesn't suit your needs.

Question 3

What is APY?

Accepted Answer

APY (Annual Percentage Yield) is the total amount of interest earned on a deposit over one year, including compounding. US banks are required under the Truth in Savings Act to disclose APY so consumers can compare accounts consistently.

Question 4

Are CDs FDIC-insured?

Accepted Answer

CDs at FDIC-insured banks are generally covered up to $250,000 per depositor, per insured bank, per ownership category. CDs at federally insured credit unions are covered by the NCUA on similar terms. Coverage depends on the issuer and how the account is owned. CDRateWise itself is not a bank and does not provide deposit insurance.

Question 5

What is the minimum deposit?

Accepted Answer

Minimums vary by provider and product. Some CDs have no minimum, while others require $500, $1,000, or more; 'jumbo' CDs often require $100,000 or more. Always confirm the minimum with the provider.

Question 6

What happens when my CD matures?

Accepted Answer

At maturity, you'll usually have a grace period (often 7–10 days) to withdraw funds, add money, or choose a new term. If you take no action, many CDs renew automatically for a similar term at the rate available at that time.

Question 7

Can I withdraw my money early?

Accepted Answer

With most bank CDs you can withdraw early, but you'll typically pay an early withdrawal penalty set by the bank. Some 'no-penalty' CDs allow early withdrawal after a short period. Brokered CDs generally can't be redeemed early with the bank, but may be sold on a secondary market, possibly at a loss.

Question 8

What is a brokered CD?

Accepted Answer

A brokered CD is a certificate of deposit issued by a bank but sold through a brokerage firm. Brokered CDs can offer access to many issuing banks from one account, and can be sold before maturity if a secondary market exists — though the sale price may be below your original principal.

Question 9

Can I hold CDs in an IRA?

Accepted Answer

Yes. Many banks and brokerages offer IRA CDs, and brokered CDs can often be held in a brokerage IRA. IRA rules, contribution limits, and tax treatment apply. IRA deposits fall into a separate FDIC ownership category for certain retirement accounts.

Question 10

Does requesting information affect my credit score?

Accepted Answer

Submitting an enquiry through CDRateWise does not involve a credit check. Opening a deposit account with a provider generally doesn't require a hard credit inquiry, although some banks may review consumer reports (such as ChexSystems) as part of identity and account verification.

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