Compare CD Account Interest Rates
Certificates of deposit (CDs) are time-deposit accounts insured by the Federal Deposit Insurance Corporation (FDIC). They are low-risk savings vehicles where deposited funds are intended to be locked (at the CD rate at account opening) until maturity, when the money may be withdrawn altogether with the accrued interest. Withdrawing CDs prior to maturity may result in early withdrawal penalty fees.
Frequently Asked Questions
Why choose a CD over a savings account?
For a CD, in exchange for receiving a slightly higher interest rate, you agree that you cannot touch your money for a predetermined amount of time. If you are hesitant to commit, try comparing rates through savings and CD calculators. Having exact numbers will give you a clearer picture on what your money will look like in the long run. It might turn out that a CD is currently not right for your financial situation.
What are the requirements for opening a CD?
After providing proper identification, you need to consider how much money you would like to lock up and for how long. Most CDs with higher rates require larger minimum deposits. Also, if you already have an account with the bank, it may offer you better rates and terms on the agreement.
How does a CD work?
Most banks will not allow you to touch either the principal or the interest until maturity. The interest will be compounded depending on the terms, which means it will be added to the principal and earn interest on itself.
At the end of the term, the CD reaches maturity at which point you have two options: renew the CD or take out the money. Banks will let you know before your CD matures, so if you choose not to respond with instructions, they will automatically renew the CD for the same term, usually 10 – 15 days after expiration.