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Certificate of Deposit

Certificates of deposit (CDs) can be a good choice when you want steady, predictable investment income that is federally insured.1

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Buying a CD in 5 Easy Steps

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For steady, predictable income that is also FDIC-insured, many investors turn to CDs: certificates of deposit.

It's easy to find and purchase a CD that is right for you in just a few quick steps on Schwab.com

Start by logging in to your account and choosing Trade > CDs.

Select the account you'd like to use when purchasing your CD by checking the "Accounts" dropdown.

Now you can browse the highest yielding CDs from the many banks available through Schwab CD OneSource.

Each list includes a range of dates they may mature on.

Choose different timeframes and reorder the list by clicking coupon payment, maturity date, or Annual Percentage Yield.

Click on a bank name for a detailed description with information like maturity date, first coupon payment, settlement date, and how often you will receive interest.

Once you know which CD you'd like to purchase, click Buy.

This will bring you to order entry with all the relevant CD information pre-populated.

Here, review the details of the bank name, coupon, and maturity date,

and you'll just need to enter the total amount you'd like to invest in the CD.

Note that this field is already in the thousands, so enter accordingly.

Here, we're investing $50,000 so we'll enter "50"

Now you have the opportunity to choose whether or not you'd like to rollover, or reinvest, the proceeds from your CD once it's matured.

If you decide to rollover, you can also pick the new CD’s maturity timeframe.

Also note that CD orders are marked as a limit order to "Fill or Kill", meaning it will be cancelled if not filled immediately in its entirety.

When you're ready, click "Review Order"

If everything looks correct, including the total cost, click Place Order to complete your purchase.

During order verification you may see a screen with additional disclosures that apply to your selected CD.

Once you’ve reviewed, click "Continue"

You'll see an order acknowledgment where you can again confirm your trade details, and at any time you're logged into your Schwab account, you can check the order status of your CD by hovering over "Trade" and clicking "Order Status".

Find current rates and CDs that fit your fixed income needs by logging in at schwab.com/cd
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What is a Certificate of Deposit?

  • What is a Certificate of Deposit?

    CDs are bank deposits that pay a stated amount of interest for a specified period of time and promise to return your money on a specific date. They are federally insured and issued by banks and savings-and-loans institutions.

    Because they are generally considered safe, CDs can be a considerable addition to the fixed income portion of an investment portfolio.

The Benefits and Risks of a CD

Certificates of Deposit benefits and risks
Benefits Risks
Steady and predictable – Lock in an interest rate for a set period of time, while also generally providing a better interest rate of return than a savings account. 

Broad selection – Choose from different account types and from terms that range from 1 month to 20 years. 

Insure more money using FDIC coverage – Current FDIC coverage insures each individual bank up to $250,000 per depositor1.
 Market risk – The most common risk is that you will need your funds before the CD matures. Although there are no early redemption fees, you may receive less than your original purchase price. 

Call risk – For callable CDs, the issuer can redeem, or "call," your CD from you for the full amount before it matures. The risk is that the issuer will exercise a call option at an unfavorable time for the holder, such as when interest rates decline.

Current CD rates available through Schwab CD OneSource

See below for a selection of today's CD rates

Current CD rates available through Schwab CD OneSource
Maturity Ranges  Rates up to
1-3 Month CDs 5.46% APY
4-6 Month CDs 5.42% APY
7-9 Month CDs 5.34% APY
10-18 Month CDs 5.50% APY

Looking for other cash solutions to help you reach your goals?

See rates for cash products at Schwab and compare the features and benefits of each.

Minimize exposure to interest rate fluctuations with a CD ladder.

A CD ladder is a type of fixed income investment strategy that uses a portfolio of individual CDs which mature on different dates. With brokered CDs, avoid trying to time the market.

Learn more about ladders
CD Ladder

Talk to a Schwab Fixed Income Specialist.

Our specialists offer objective, non-commissioned guidance on a wide range of fixed income products and strategies including ladders, bullets, barbells, and more. You can expect personalized service on topics such as:

  • Help with choosing from a wide variety of investment options
  • Suggestions for adjusting to changing market conditions
  • Assistance with using our online trading features

Call 877-903-8069

Specialist

Have a specialist contact you.

Common questions

No, as long as you hold it to maturity and don't exceed FDIC insurance limits. CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank per depositor or per account type. In the event of a bank failure, holders of CDs issued by the failed institution would be covered up to the FDIC limits, while any amount above those limits would depend on the residual value, if any, of the financial institution. Additionally, brokered CDs can usually be sold prior to maturity. It's possible to receive an amount below the original investment amount if a CD is sold prior to maturity, depending on market conditions.

CDs generally pay a fixed rate of interest based on the current economic environment. The timing of the payments can vary, but most CDs tend to pay interest monthly, semiannually, or at maturity.

A ladder strategy helps investors stay invested and takes the guesswork out of timing. If interest rates rise, maturing CDs can be reinvested at higher yields. If interest rates fall, the interest earned from the existing CDs would likely be higher than market interest rates. A CD ladder doesn't take away interest rate risk – but it allows investors to stay invested regardless of interest rates are rising or falling.

There are a number of ways to manage your cash holdings. Learn about more options for your Cash Investments here. For example, Money market funds are one way to keep your investments liquid while earning high yields, but they have their own unique characteristics that investors need to be aware of.

We'll help you sell the CD at the current market rate by requesting bids on your CD and contacting you with the highest one. If you decide to sell, you'll receive the bid price plus any accrued interest. There are no guarantees that you'll get what you originally paid for the CD.

All CDs in CD OneSource are offered by FDIC-insured banks. The Federal Deposit Insurance Corporation insures deposits at FDIC-insured banks. The basic insurance amount is $250,0001 per depositor per insured bank. Each CD you purchase from a different institution is FDIC-insured in aggregate based on ownership type at that bank. For example, if you own two CDs, $250,000 from one bank and $250,000 from a second bank, and you have no other deposits at those banks, you’re covered for $500,000.

Schwab offers brokered CDs which can be resold through brokerage firms at the market price. If the client wants to redeem before the maturity, the price may differ from the original purchase price of CD, which may result in a gain or loss. Banks offer traditional CDs and often have you forfeit the interest payment to redeem CD early. Bank CDs cannot be held in a brokerage account and must be held in an account with that specific bank.

Questions? We're ready to help.

1. Funds deposited at an FDIC-insured institution are insured, in aggregate, up to $250,000 per depositor, per insured institution based upon account type by the FDIC. The FDIC considers any other deposits you may have with an issuing bank. CDs you purchase from a particular bank are aggregated with any other deposits you may have with the issuing bank for determining FDIC insurance coverage (i.e., if you already have deposits of $250,000 with a bank, don't purchase CDs from the same bank in the same ownership category). Because the deposit insurance rules are complex, you may want to use FDIC’s online tool, Electronic Deposit Insurance Estimator (EDIE), to estimate your total coverage at any particular bank.

2. Certificates of deposit available through Schwab CD OneSource typically offer a fixed rate of return, although some offer variable rates. They are FDIC-insured and offered through Charles Schwab & Co., Inc.

3. Schwab reserves the right to act as principal on any fixed income transaction, public offering or securities transaction. When Schwab acts as principal, the bond price includes our transaction fee (outlined above) and may also include a markup that reflects the bid-ask spread and is not subject to a minimum or maximum. When trading as principal, Schwab may also be holding the security in its own account prior to selling it to you and, therefore, may make (or lose) money depending on whether the price of the security has risen or fallen while Schwab has held it. When Schwab acts as agent, a commission will be charged on the transaction Charles Schwab Bank and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.
 

Fixed income securities are subject to increased loss of principal during periods of rising interest rates. Fixed income investments are subject to various other risks, including changes in credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors.

A bond ladder, depending on the types and amount of securities within the ladder, may not ensure adequate diversification of your investment portfolio. This potential lack of diversification may result in heightened volatility of the value of your portfolio. You must perform your own evaluation of whether a bond ladder and the securities held within it are consistent with your investment objective, risk tolerance and financial circumstances.

Certificates of deposit available through Schwab CD OneSource typically offer a fixed rate of return, although some offer variable rates. They are FDIC-insured and offered through Charles Schwab & Co., Inc.

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Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

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