are cds fdic insured

CDs are considered low risk because, like savings accounts, they are FDIC-insured up to $250,000. CDs usually don't have monthly fees, but they do impose. Certificates of Deposit. A CD can allow you to enjoy higher fixed interest rates while still having all the security of an FDIC-insured* savings account. And. CDs are a great way to make your money grow, so long as you have clear long- or short-term financial goals in Your account is safe with FDIC insurance.

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The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where and in what order products appear. This table does not include all companies or all available products. Bankrate does not endorse or recommend any companies.

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

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Our banking reporters and editors focus on the points consumers care about most — the best banks, latest rates, different types of accounts, money-saving tips and more — so you can feel confident as you’re managing your money.

Bankrate's guide to choosing the right CD rate

Bankrate's experience on financial advice and reporting

At Bankrate, we regularly survey approximately 4,800 banks and credit unions in all 50 states to provide you with one of the most comprehensive comparisons of interest rates. All of the CD accounts below are insured by the FDIC at banks or the NCUA at credit unions. When selecting the best CD account for you, look for the highest yield while also considering introductory rates, minimum balances and accessibility.

We strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. The top banks listed below are based on factors such as APY, minimum balance requirements and broad availability.

Top CD rates by term

Note: The annual percentage yield (APYs) shown are as of Nov. 19, 2021. The APYs for some products may vary by region.

Best 3-month CD rates

Best 6-month CD rates

Best 9-month CD rates

Best 1-year CD rates

Best 2-year CD rates

Best 3-year CD rates

Best 4-year CD rates

Best 5-year CD rates

The Federal Reserve and CD rates

The Federal Reserve's interest rate decisions can impact the rates that banks offer on CDs. When the Fed raises or lowers the federal funds rate, banks typically respond by moving savings and money market account yields in the same direction. CDs tend to track Treasurys closely. In 2019, a year when the Fed lowered rates three times, CDs generally decreased before or after a Fed rate cut.

Two emergency Fed rate cuts in March 2020, and decreasing Treasurys last year, caused high-yield CDs to decrease.

If you’re concerned about rates potentially decreasing or want to lock in a fixed yield, a CD may be right for you. Savings accounts and money market accounts generally have variable rates, meaning your yield can decrease. Introductory rates on those accounts are an exception to this rule. Intro rates may give you a fixed rate during the introductory period, though there may be certain requirements to keep this rate.

National average interest rates for CDs

Learning about the average interest rates is a great way to get an idea of the CD rate environment. But you should aim to get a CD with a yield much higher than the average. The top CD yields are typically available at online banks.

National average research methodology

The " National Average," or "national survey of large lenders," is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We've conducted this survey in the same manner for more than 30 years, and because it's consistently done the way it is, it gives an accurate national apples-to-apples comparison.

Here are the current average rates for the week of Nov. 10, 2021, according to Bankrate's weekly survey of institutions:

CD TermCD National Average APY

Note: Average APYs are shown. See the table at the top of the page for APY comparisons.

Best CD rates from top banks

Before applying for a certificate of deposit, be sure to read expert advice and tips below to ensure a financially safe decision. Here are Bankrate's top picks for banks with the best CD rates:

Marcus by Goldman Sachs: 6 months – 6 years, 0.15% APY – 1.00% APY; $500 Minimum Deposit to Open

    6 months0.15%$500
    7 months*0.45%$500
    9 months0.55%$500
    11 months*0.35%$500
    12 months0.55%$500
    13 months*0.25%$500
    18 months0.55%$500
    24 months0.70%$500
    3 years0.75%$500
    4 years0.80%$500
    5 years1.00%$500
    6 years1.00%$500
Best CD Rates from marcus by goldman sachs

Overview: Marcus is the consumer banking arm of investment firm Goldman Sachs. It offers a range of savings products and personal loans. That includes a number of CD options and a high-yield savings account. And like other online banks, its rates are highly competitive. Marcus often is found within the group of banks offering the highest CD rates across all terms. In fact, Marcus guarantees that you'll receive the highest rate it offers on a CD within 10 days of opening an account, as long as you deposit $500 during that time. So, if you purchase a CD and the bank's rate goes up within 10 days after you purchase, you'll receive the higher rate.

Perks: In addition to high yields, Marcus' CDs offer a wide range of terms — from six months to six years — providing plenty of flexibility. And its 10-day guaranteed are cds fdic insured on CDs means you won't miss out on a higher return. On a high-yield CD, you can add to it during the first 30 days – even if you’ve reached the $500 minimum requirement.

Marcus by Goldman Sachs now has an app available on iOS and Google Play, where you can view your account balance.

What to watch for: Since it's an online bank, Marcus doesn't have any branches. Marcus also doesn't offer a checking account. If you're looking for a full-service bank, you may be better served elsewhere. On its high-yield CDs, if you withdraw from a CD early, Marcus has a penalty of 90 days of crbauto online payment interest on a CD that has a term less than 12 months, a penalty of 270 days of simple interest on a CD ranging from one year to five years and a penalty of 365 days of simple interest on a CD with a term longer than five years.

If you’re concerned about early withdrawal penalties, Marcus has a no-penalty CD with three terms to choose from: seven months, 11 months or 13 months. You’re able to withdraw from a Marcus no-penalty CD beginning seven days after the day you fund the CD. But you can’t make a partial withdrawal.

Also, once the balance on your no-penalty CD hits the minimum balance requirement of $500, you can’t add to this CD.

Synchrony Bank: 3 months – 5 years, 0.15% APY – 0.85% APY; No Minimum Deposit to Open

    3 months0.15%$0
    6 months0.25%$0
    9 months0.35%$0
    12 months0.55%$0
    13 months0.55%$0
    14 months0.60%$0
    15 months0.55%$0
    18 months0.70%$0
    24 months0.65%$0
    3 years0.75%$0
    4 years0.75%$0
    5 years0.85%$0
CD interest rates by synchrony bank



Get Answers to Your Banking Questions

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The principal amount of an index-linked CD is insured by the FDIC up to the maximum applicable deposit insurance coverage. However, any contingent interest owed to the investor generated by the index-linked CD is the obligation of the issuing bank and is not insured by the FDIC.

In order to determine the amount of FDIC insurance coverage, the investor must include the principal amount of the index-linked Are cds fdic insured, together with all other deposits maintained by the investor at the bank.

Last Reviewed: April 2021

Please note: The terms "bank" and "banks" used in these answers generally refer to national banks, federal savings associations, and federal branches or agencies of foreign banking organizations that are regulated by the Office of the Comptroller of the Currency are cds fdic insured. Find out if the OCC regulates your bank. Information provided on should not be construed as legal advice or a legal opinion of the OCC.

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FDIC Consumer News

Spring 2013

Audio (MP3 7.64 mb)

When a Broker Offers a Bank CD: It Pays to Do Some Research

A certificate of deposit account (CD) at an FDIC-insured bank is one of the safest, most reliable investments available because it provides a predetermined fixed- or variable-rate interest computation for a set time period (usually three months to five years) and deposit insurance protection of up to at least $250,000 per depositor. Recently, you may have seen or received advertisements from deposit brokers offering FDIC-insured CDs. While using deposit brokers has grown in popularity because brokers often can negotiate higher interest rates, the CDs they sell may involve more risks than working directly with an insured bank.

FDIC Consumer News has previously cautioned readers to be careful when buying CDs from third parties, but given the increased consumer interest and ongoing reports of complaints, we offer our latest tips and information.

Use a reputable deposit broker. The FDIC does not have the authority to examine, approve or insure deposit brokers, who can be anyone from an individual transacting business alone from a home office to a major financial services firm.

If you’re thinking about an offer from an unfamiliar deposit broker, research that person’s credentials and experience. If the person claims to hold any professional licenses or certifications, verify his or her background and standing with the issuing agency, such as FINRA (the Financial Industry Regulatory Authority at or 1-301-590-6500). In addition, your local Better Business Bureau ( or your state’s consumer protection office ( may be able to provide information about whether an individual broker or a company has a history of actual or alleged misconduct.

“We’ve heard multiple examples of individuals wiring funds to someone claiming to be a reputable broker, only to later find that the broker disappeared with all of the money,” said Calvin Troup, an FDIC Senior Deposit Insurance Specialist. “Whenever you use a third party to establish a bank deposit account, you place your funds at risk if that person does not put your money in an FDIC-insured bank.”

Be skeptical if the interest rate on a brokered CD is significantly higher than other advertised rates. Some unscrupulous brokers advertise above-market rates on CDs solely as a ploy to get a consumer in the door. They then try to sell investment products that are not FDIC-insured and not in the consumer’s best interest.

In one recent case, a high-rate brokered CD was issued by a foreign bank and therefore not protected by FDIC deposit insurance. However, the marketing materials for the CD included multiple misleading references to an FDIC-insured bank, and that led consumers to mistakenly believe that the investment was subject to FDIC insurance. In reality, the role of the FDIC-insured bank was limited solely to wiring collected deposits overseas to the issuing bank.

Another example previously reported in FDIC Consumer News involved a deposit broker who offered an exceptionally high interest rate on a short-term CD by adding the broker’s own money to the interest rate paid by the issuing bank. Once that short-term CD matured, no similar high-rate CD offer was made, and instead the broker aggressively pitched a non-insured investment product that may have been a poor choice for the consumer but lucrative for the broker. Moreover, if the bank that issued the CD had failed during the term of the Wednesday food specials in lubbock, deposit insurance would only cover the principal plus accrued interest at the bank’s stated interest rate, not the broker’s advertised rate.

“It is worthwhile to familiarize yourself with the current interest rates for both traditional and brokered CDs from FDIC-insured banks,” advised Templeman. “If a broker is offering you a CD rate significantly higher than the general market rates, that broker is probably trying to lure you in to sell you another financial product that may not be FDIC-insured.”

Make sure all of your deposit will be fully insured. To protect your brokered CD from loss if the bank fails, follow these steps to confirm that your money is placed in a properly titled deposit account at an FDIC-insured bank and that all of it is within the deposit insurance limits. First, get the name of the bank where your money is to be deposited and verify that it is FDIC-insured by calling the FDIC toll-free at 1-877-275-3342 or searching BankFind, the FDIC’s database of insured institutions at

Second, ask your broker to confirm that the deposit account records for its brokered CDs reflect the broker’s role as an agent for its clients (for instance, by titling the account “XYZ Brokerage, as Custodian for Clients”). That way, each client who owns the CD can qualify for up to at least $250,000 in deposit insurance. This coverage is generally referred to as “pass-through” insurance because it bypasses the broker and is calculated based on the ownership interests of the individual depositors.

Also with pass-through insurance, a consumer’s brokered deposits are added to any traditional deposits he or she has at the same bank for purposes of calculating coverage. So, if your combined brokered and traditional deposits at a single bank  exceed $250,000, you should call the FDIC to discuss your coverage.

Learn whether your only option to withdraw early from a brokered CD is to sell it. Traditional CDs obtained directly from a bank often allow the depositor to pay a penalty to withdraw the money before the CD matures. However, brokered CDs, which typically have much longer maturities (up to 10 or 20 years), rarely have that kind of early withdrawal feature. For them, your only option for early withdrawal may be to have the broker sell your ownership interest to another investor at the prevailing market value. If CD interest rates have increased since you acquired your brokered CD, the value of your deposit may have declined, and you could have a loss of principal that would not be insured by the FDIC. But if interest rates have fallen since you purchased your CD, the value may have risen, and you may be able to sell the CD at a gain.

If you buy a CD directly from a bank and it fails, you will receive an insurance payment faster than you would if you purchased it through a broker. With brokered CDs, the FDIC must first obtain from the broker the name and deposit amount for each Are cds fdic insured investor. Then the FDIC will send the deposit insurance check to the broker, who in turn is responsible for distributing the payment to the consumer, and that can result in further delays. Note that the FDIC does not supervise or become involved in the arrangements between brokers and consumers.

If you have a problem with a CD sold by an investment firm,you have a couple of options. To submit a are cds fdic insured against a salesperson, contact FINRA. If your complaint is about a CD or another financial product sold by an investment firm, consult the U.S. Securities and Exchange Commission ( or 1-800-SEC-0330).



How Risky Are Certificates of Deposit?

Life is all about balancing risks and rewards — especially when it comes to your finances. You want your money to earn interest at the highest rates, but you also want to safeguard your principal.

Generally speaking, high-risk investments — like some stocks and bonds — yield higher returns than FDIC-insured bank products — like savings accounts and certificates of deposit (CDs). But the trade-off is that you could end up losing money, even principal. If you’re leaning toward a more conservative approach to earning interest, CDs can be a good place to start.

So, how risky are CDs? The answer depends on your definition of risk and your earnings expectations within your own savings plan. Here’s what you need to know to weigh the risks and rewards of saving with CDs.

CDs are almost always FDIC-insured.

CDs from FDIC-member banks are insured by the Federal Deposit Insurance Corporation up to the maximum amount allowed by law, which means they are about as safe a place to save as you can get. The FDIC protects the money in deposit accounts — CDs, savings and money market accounts, and checking accounts — against loss if the bank fails.

In order to get the full protection the federal insurance provides, you do want to be sure your combined deposits land within federal limits. The FDIC offers an online calculator to help you determine the coverage your deposits qualify for.

CDs typically offer higher rates than other deposit account types.

While other deposit accounts, like savings and checking accounts, are also protected by FDIC insurance at member banks, you’ll usually get higher annual percentage yields (APYs) with CDs than you will with those other types of accounts. You’ll likely find the highest rates offered on longer-term CDs.

Yet, CDs often yield lower returns than investment accounts.

Even the best CD rates usually end up yielding lower returns than investments, like stocks and bonds. But unlike CDs, investment accounts are not FDIC-insured. That means you can lose money, including your principal, on your investments.

CDs usually require you to “lock in” a given rate.

The fixed rates offered by most CDs can be a good thing. Are cds fdic insured you secure a great rate, you’ll keep that rate during the length of the CD term.

But those fixed rates also mean you might be stuck with a lower rate if interest rates rise before your term is up. Some banks alleviate that risk by offering “bump-up CDs” or “step-up CDs” that give you the option of increasing your rate at some time over the course of your CD’s term. That’s the idea behind the Raise Your Rate CDs at Ally Bank.

Early withdrawal fees can eat into your interest earnings.

A CD usually requires you to keep the money in the account until the end of its term, in other words, until maturity. If you end up needing the money before then, you’ll likely end up paying an early withdrawal penalty. So it’s important to consider the length of time you can afford to put the money away.

Note, however, that there are several types of CDs available, including CDs without early withdrawal penalties, like the Ally Bank No Penalty CD. Just be sure you understand all the terms of any account you consider.

You don’t want to lose ground to inflation.

Leaving your money in any deposit account may mean losing some purchasing power over time if your rate of return doesn’t keep pace with the rate of inflation. But, with some good comparison-shopping skills and an eye on changing rates, you should be able to find CDs — especially long-term CDs — that more than keep up.

Ally Bank tip: Online banks often offer better rates than traditional brick-and-mortar banks.

View Our CD Rates

CD laddering can help you get around some CD drawbacks.

One way to make sure you get the maximum benefit with minimum certificate of deposit risk is to use a CD laddering strategy. A CD ladder basically spreads your funds over a number of CDs with staggered maturity dates.

With a CD laddering strategy, you take advantage of the best long-term CD rates, have periodic access to your funds (avoiding early withdrawal penalties), and make sure you get the highest rates offered each time one of your CDs matures. This makes CD laddering especially well-suited to saving for your long-term goals.

You can balance solid returns with peace of mind.

With the right CD(s) and a good savings strategy, it’s possible to strike the right balance between earning interest at competitive rates and protecting your savings against loss.

No matter which CD — or combination of CDs — you choose, you can count on Ally Bank to offer competitive rates and great customer service. Most of our CDs have no minimum deposit required. You also get our Ten Day Best Rate Guarantee with every CD: When you fund your CD within 10 days of your open date, you’ll get the best rate we offer for your term and balance tier if our rate goes up within that time.

And, of course, if CDs aren’t the best fit for you right now, we have lots of other ways to help you save. Explore your options with our Online Savings Account and Money Market Account.



As a member of the Certificate of Deposit Account Registry Service (CDARS), Rockland Trust can provide you with easy access to multi-million dollar FDIC protection on your Certificate of Deposit (CD) investments.

What is CDARS?

CDARS is the easiest, most convenient way for individuals, businesses, and public entities to enjoy full FDIC insurance on deposits larger than $250,000.

Why is that? 

One Bank: Everything is handled by Rockland Trust—the bank where each relationship matters.  Your large deposit is broken up into amounts within the $250,000 FDIC insurance limit and placed in other safe and secure banks who are members of the CDARS network.  Those member banks then issue CDs in amounts within the $250,000 FDIC insurance limit so that your entire investment, plus interest, is fully insured by the FDIC.1

Various CDs on One Statement: Choose multiple CDs from a list of varied terms and competitive rates, and receive one all-encompassing statement listing your Are cds fdic insured along with their maturity dates and interest earned.

And, as always, your personal and confidential information remains protected. 

Why choose CDARS?

Safety:Enjoy the peace of mind that comes with investing your money with an institution that values your relationship and get access to multi-million dollar FDIC insurance.

Convenience:Work with one bank – Rockland Trust, and stop running from bank to bank for full FDIC insurance coverage.

Performance:Your money earns CD-level returns which may compare favorably with other investment alternatives, including Treasuries, corporate sweep accounts, and money market funds.

Is it for me?

Rockland Trust is excited to offer the CDARS service, a safe and exciting feature for all customers.  Anyone interested in the convenience of working with a single bank with the security of full FDIC insurance can benefit.

  • Individuals
  • Advisors of all types:
    Trustees, Lawyers, Accountants
  • Businesses
  • Non-Profits and Public Funds

To learn more about CDARS and how to participate:

  • Call 508.732.7072
  • Visit your local branch
  • Visit

Certificates of Deposit (CDs)

Top Features

  • Fixed or variable rate for the term of the CD – from 32 days to 72 months
  • Optional beneficiary designation
  • CDs must be opened at your local branch
  • Accounts are FDIC-insured up to the maximum applicable limit


Early Withdrawal Penalty (for account terms greater than 364 days):

​​$50 plus 182 days’ interest on the non-interest portion of the withdrawal computed, without compounding, at the interest rate in effect when the withdrawal is made if the term of the account during which the withdrawal is made is more than 364 days; or

Early Withdrawal Penalty (for account terms less than 365 days)

$25 plus 91 days’ interest on the non-interest portion of the withdrawal computed, without compounding, at the interest rate in effect when the withdrawal is made if the term of the account during which the withdrawal is made is less than 365 days.

Is this product right for you?

This product is best for people who:

  • Are looking for a reliable savings interest rate
  • Are comfortable locking in their money for a period of time
  • Want a savings portfolio that includes low-risk accounts
  • Seek FDIC-insurance coverage up to the maximum limits
  • Want to add diversity to existing savings portfolios ​

Eligibility Requirements

  • The minimum deposit required to open:
  • M&T Select CD accounts require a qualifying M&T Bank checking account to open:
    • Customer must have or open one of the following qualifying checking accounts: MyChoice Premium Checking, M&T Select, M&T Select With Interest, Employee M&T Select With Interest or Power Checking ​​
  • CDs must be opened at an M&T Bank branch.​

To open an M&T Select® CD, customer must have or open a MyChoice Premium℠ Checking, M&T Select®, M&T Select® With Interest, Employee M&T Select® With Interest or Power Checking account. The minimum deposit required to open any CD account is $1,000. After CD is opened, the minimum balance to obtain the advertised APY is $1.00. APYs stated are accurate as of today's date. A penalty may be imposed for early withdrawal. Fees could reduce earnings on the account. Offer not available for non-personal accounts and may not be available at all M&T Bank branches. Maximum deposit is $1 million per customer. Advertised APYs cannot be combined with any other offer. Rates are subject to change without notice.


Editorial Note: Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our marketing partners don’t review, approve or endorse our editorial content. It’s accurate to the best of our knowledge when posted.

Advertiser Disclosure

We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports are cds fdic insured helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

If you’re looking for ways to save that will grow your money more quickly than a traditional savings account, it may be worth comparing a couple of common options: money market td near me. CD.

It’s important to build a financial strategy that incorporates savings goals. And while traditional savings accounts are an option, they aren’t the only way to build up your funds. Money market accounts and certificates of deposit, or CDs, are other options that may help you earn more money through higher interest rates.

When you compare money markets and CDs, one option may stand out as a better fit for you. Your choice will likely depend on your specific needs, like access to your money or check-writing capabilities. And like any financial decision you make, it’s important to understand the positives and negatives of each type of deposit account.

Let’s look at some of the pros and cons of money market accounts vs. CDs.

Earn a high-yield savings rate with Credit Karma Money™ Save Start Saving

What are money market accounts and how do they nearest citibank branch from my location banks and credit unions offer money market accounts, which are similar to both savings and checking accounts. These accounts earn interest, like savings accounts, while also providing some of the access you get with a checking account, though with some limitations. For example, withdrawals and payments via check, debit card, draft or electronic transfer are limited to six per month total for money market accounts. But withdrawals or payments done via ATM or in person, by mail, by messenger or via telephone check don’t count against that limit.

Keep reading: What is a money market account?

Pros of money market accounts

The deposits you put in a money market account earn interest. But rates can vary, so it’s wise to do some research to see which financial institutions offer the highest money market rates. At the end of July 2019, the national average interest rate for money market accounts was 0.18% for deposits less than $100,000 and 0.29% for deposits of $100,000 or more, according to the Federal Deposit Insurance Corporation.

A money market account is generally considered a low-risk savings option and can be insured by the FDIC if it’s at a bank. The National Credit Union Administration insures money market accounts at credit unions. When insured, the FDIC and NCUA cover money market accounts up to $250,000.

Let’s recap the pros of money market accounts.

  • Higher earning: Interest rates typically higher than a traditional savings account
  • Low risk: Insured by FDIC or NCUA
  • Flexibility: Some features of a checking account

Cons of money market accounts

While money market accounts offer similar features to a checking account, those features are limited. For example, you can only withdraw money or make payments up to six times a month via check, debit card, draft or electronic transfer. But if you have more than six monthly transactions to make, know that making withdrawals at an ATM or payments on the phone doesn’t count against that limit.

Unpredictability can be another drawback. The interest rate on a money market account can fluctuate, while a regular savings account typically has a fixed rate you can depend on. Though with money market accounts that are tiered, you could earn more interest as your balance gets higher.

Money market accounts may also require you to maintain a minimum balance that may seem high. If your balance falls below the minimum, you could face account fees or other consequences on top of potentially earning less due to a lower balance if the account is tiered.

Let’s recap the cons of money market accounts.

  • Minimums: Potential minimum deposit requirements
  • Unpredictability: Typically have variable interest rate
  • Limitations: Six total transactions allowed using a check, debit card, draft or electronic transfer

Common question: Are money market accounts related to money market mutual funds?

While the name is similar, money market accounts are different from money market mutual funds, which are investment options offered by investment companies. Because money market mutual funds are not insured by the FDIC or NCUA, there’s a greater risk you could lose money.

What are CDs and how do they work?

Offered by many banks and credit unions, a certificate of deposit is a unique type of savings account that requires you to keep the funds in the account for a set period of time.

CD terms are often anywhere from six months (short-term CDs) to five years or more (long-term CDs). At the end of the term, the CD “matures,” and you’ll receive the initial amount you put into the CD, plus the interest that accrued on that amount over the CD term. The rate of return you receive on a CD (and other types of deposit accounts) is the annual percentage yield, or APY.

Earn a high-yield savings rate with Credit Karma Money™ Save Start Saving

Pros of CDs

Because the financial institution holds your money for a specific length of time, CDs typically offer higher interest rates compared to traditional savings accounts and some may offer higher interest than money market accounts. And the longer your CD term, the higher your interest rate is likely to be. For example, CDs for less than $100,000 earn on average 0.39% for a six-month term, 0.56% for a 12-month term, 0.86% for a 36-month term and 1.10% for a 60-month term, according to the most recent national data available from the FDIC.

Certificates of deposit also typically have fixed interest rates, so you know at the outset how much interest your investment will earn by the maturity date. There are exceptions, though. If you get a variable-rate CD, the interest rate can change according to rules the issuing bank or credit union will set and explain.

And like both a money market account and a savings account, a CD is generally considered a low-risk savings option because it’s insured by the FDIC or the NCUA for up to $250,000.

Let’s recap the pros of CDs.

  • Predictability: Fixed interest rates (with exceptions)
  • High earning: Higher rates than traditional savings accounts
  • Low risk: FDIC or NCUA insured
  • Flexibility: Different term lengths
  • Less temptation: Funds locked for a set period of time, unavailable to spend


What is a CD rollover?

When a CD with a rollover feature matures, the money you put in the CD (and possibly the interest earned) will automatically be reinvested in a new CD — unless you opt out. Some CDs offer automatic rollovers and others don’t offer rollovers at all. If they’re available, your financial institution is required to send you a written notice prior to CD maturity notifying you of the end date and any automatic-renewal features.


Cons of CDs

CDs typically have a minimum amount that you’re required to deposit. The amount can vary widely, but it’s common to see minimums in the thousands, and they can venture into tens of thousands. And the higher-interest-rate CDs may require a higher minimum deposit amount.

Once you put your money into a CD, you probably won’t be able to withdraw it without penalty before the maturity date. That penalty may vary depending on the financial organization’s rules, including how long the money was held in the account. Make sure to learn the details of the early-withdrawal penalty in the terms and account agreement, keeping future needs in mind.

And take note: Some institutions offering high-yield CDs may not be completely honest. FINRA — the Financial Industry Regulatory Authority are cds fdic insured has warned investors to be wary due to reports of organizations advertising high-yield CDs as bait to get people in the door.

These promos might get you to show up in person and then a representative might try to get you to invest a sizable amount of money ($25,000 or more) into an annuity that’s not insured and which is much riskier, according to a FINRA alert.

If you’re unsure about any financial opportunity, you can use BrokerCheck to help verify if the person and firm are registered with FINRA.

Let’s recap the cons of CDs.

  • Minimums: Minimum deposit requirements
  • Limitations: No access to your money while it’s in the CD
  • Penalties: Costs for early withdrawals

Money markets vs. CDs

Money market accounts and CDs are both savings vehicles that can put your money to work for you, earning more interest than a traditional savings or checking account. Though a CD will likely have a higher interest rate than a money market account. To check and compare the most-recent interest rate data published by the FDIC for savings accounts, money market accounts, CDs and more, visit the FDIC online.

When looking at data, keep in mind that while CDs may earn more, you’ll be sacrificing flexibility, because the money will be required to stay in the account for a specific term or else you can face penalties for early withdrawal. With money market accounts, you can expect a lower interest rate, but you’ll gain regular access to your money and the ability to do things like write a few checks each month.

Bottom line

So when it comes to money market accounts vs. CDs, which is better? That’s all up to how you want your money to work for you.

It’s important to understand the pros and cons of money market accounts and CDs so that you can choose the savings vehicle that best meets your savings goals. For some people, the flexibility of a money market account wins hands-down. For others, the higher interest rates of CDs are a top priority.

There’s no one right or wrong answer for which type of savings vehicle is better. And your overall savings plan can include both a money market account and CDs. The important thing is to take as much advantage of savings opportunities as you can so that your money can grow and work harder for you.

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About the author: Laura Malm is a writer and editor with a bachelor’s degree in journalism and strategic communication from the University of Minnesota. She is passionate about financial literacy and helping others feel confident in th… Read more.

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2 Replies to “Are cds fdic insured”

  1. so i get my phone out and withdraw cash, then sum dude hits me in the head and takes the money and my phone....much safer

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