Certificates of Deposit (CDs)
Certificates of deposit (CDs) can be a good choice when you want steady, predictable investment income that is federally insured.1
Buying a CD in 5 Easy Steps
For steady, predictable income that is also FDIC-insured, many investors turn to CDs: certificates of deposit.
Certificates of Deposit
Certificates 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.
Benefits and Risks
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 rates
|Maturity Ranges||Rates up to|
|1-3 Month CDs||5.20% APY|
|4-6 Month CDs||5.27% APY|
|7-9 Month CDs||5.33% APY|
|10-18 Month CDs||5.35% 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 portfolio of individual CDs that mature on different dates, helping investors avoid trying to time the market. Staying disciplined and reinvesting the proceeds from maturing CDs can help investors to ride out interest rate fluctuations.
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
Have a specialist contact you.
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.