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A Certificate of Deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time — called a "term." In exchange, the bank pays you a higher interest rate than a regular savings account. At the end of the term, you get your money back plus interest.
⚠️ Early Withdrawal Penalty
If you pull your money out before the term ends, you'll usually pay a penalty — typically 60 to 270 days of interest. No-penalty CDs let you withdraw early without a fee, but often offer slightly lower rates in exchange.
📈 CD vs HYSA
A High-Yield Savings Account (HYSA) offers flexibility — you can withdraw anytime. A CD locks your money in for a set term but usually offers a higher guaranteed rate. CDs are best if you know you won't need the money for a while.
🪜 CD Ladder Strategy
Instead of putting all your money into one CD, split it into multiple CDs with different terms (e.g., 6-month, 1-year, 2-year). As each matures, reinvest. This gives you both high rates and regular access to your cash.
Frequently Asked Questions
Are CDs FDIC insured?
Yes. CDs from FDIC-insured banks are covered up to $250,000 per depositor, per bank. All banks listed on this page are FDIC insured.
When is a CD a good idea?
CDs make sense when you have cash you won't need for a defined period — like saving for a down payment in 2 years, or parking an emergency fund you've already built. They offer a guaranteed return with zero market risk.
What happens when my CD matures?
When your CD matures, you typically have a grace period (usually 7–10 days) to withdraw your money or roll it into a new CD. If you do nothing, most banks automatically renew it at the current rate.
How are CD rates determined?
CD rates are closely tied to the Federal Reserve's benchmark interest rate. When the Fed raises rates, CD rates tend to go up. Online banks typically offer higher rates than traditional brick-and-mortar banks because they have lower overhead costs.
How often are these rates updated?
We review and update rates regularly. Rates shown are approximate and may change — always verify the current rate on the bank's website before opening an account.
Disclaimer: Rates shown are for informational purposes only and may not reflect current offerings. Always verify rates directly with the bank before opening an account. MoneyDecoded may receive compensation from some of the companies listed on this page. This does not influence our rate comparisons or rankings.