What is a CD?
A Certificate of Deposit (CD) is a savings product where you lock your money for a set period in exchange for a guaranteed interest rate. CDs typically offer higher rates than regular savings accounts but you can't access your money without penalty until the term ends.
Current CD Rate Comparison
*Rates are subject to change. Check with banks for current offers.
Types of CDs
Traditional CD
Fixed rate for a set term. Penalty for early withdrawal. Best when you're sure you won't need the money.
No-Penalty CD
Withdraw anytime without penalty. Lower rates than traditional CDs but more flexible.
Bump-Up CD
Option to increase your rate once if rates rise during your term.
Jumbo CD
Requires large deposit ($100,000+) in exchange for higher rates.
CD Laddering Strategy
A CD ladder spreads your money across multiple CDs with different maturity dates. This provides regular access to funds while earning higher rates on longer terms.
Example: $10,000 CD Ladder
- $2,000 in 1-year CD
- $2,000 in 2-year CD
- $2,000 in 3-year CD
- $2,000 in 4-year CD
- $2,000 in 5-year CD
Each year, one CD matures. You can either use the money or reinvest in a new 5-year CD at the current rate.
When to Choose a CD
Good For:
- Money you won't need for the term length
- Locking in high rates before they drop
- Guaranteed returns with no market risk
- Diversifying your savings strategy
Not Ideal For:
- Emergency funds (need immediate access)
- When rates are expected to rise
- Short-term savings goals
- Money you might need unexpectedly
Early Withdrawal Penalties
If you withdraw before your CD matures, you'll typically pay a penalty based on how much interest you'd earn:
- 3-6 month CDs: 30-90 days of interest
- 1 year CDs: 3-6 months of interest
- 2-5 year CDs: 6-12 months of interest
Always check the penalty before opening a CD. In some cases, penalties can eat into your principal.
Compare Your Savings Options
Not sure if a CD is right for you? Compare with high-yield savings accounts.
See Savings Rates