Banks and credit unions are your main sources for CDs

You can buy a certificate of deposit from any bank or credit union that offers them. Most large national banks sell CDs—Chase, Bank of America, Wells Fargo, Citibank, and others all have them. Your local or regional bank almost certainly does too. Credit unions, which are member-owned financial institutions, also offer CDs, often with competitive rates.

The bank or credit union you already use is a logical starting point. You can walk into a branch, call their customer service line, or log into your online account to open a CD. You do not need to be an existing customer to buy a CD from a bank—you can open one as your first account with them.

Online banks often have higher CD rates

Online-only banks—institutions with no physical branches—frequently offer higher CD rates than brick-and-mortar banks. These banks include Marcus by Goldman Sachs, Ally Bank, American Express Bank, Discover Bank, and Vanguard. Because they have lower overhead costs, they can pass higher rates to depositors.

You open an online CD entirely through a website or mobile app. You fund it by transferring money from another bank account you own. The process is usually faster than opening one in person, and you can compare rates across multiple online banks before deciding. Online CDs are insured the same way as CDs at traditional banks—up to $250,000 per depositor through the Federal Deposit Insurance Corporation (FDIC).

Key Takeaways

  • Any FDIC-insured bank or credit union can sell you a CD, whether it has physical branches or operates only online.
  • Online banks typically offer higher CD rates than traditional banks because they have lower operating costs.
  • You do not need to be an existing customer to open a CD; you can open one as a new account.
  • All CDs at FDIC-insured institutions are protected up to $250,000, regardless of where you buy them.
  • You can compare rates across multiple banks before committing, since CD terms and rates vary widely.

What to look for when choosing where to buy

The most important factor is the interest rate, since that determines how much your money will earn. Rates vary significantly between banks and change frequently. A CD at one bank might pay 4.5% while another pays 5.2% for the same term—that difference adds up over time.

The second factor is the term length available. Most banks offer CDs with terms of three months, six months, one year, two years, three years, and five years. Some offer longer terms or shorter ones. If you know you will need your money in 18 months, you want a bank that offers an 18-month CD, not just one-year and two-year options.

The third factor is whether the bank is FDIC-insured. This protects your deposit up to $250,000 if the bank fails. All major banks and most credit unions are FDIC-insured. Credit unions are insured through the National Credit Union Administration (NCUA), which provides the same protection. Before opening a CD anywhere, confirm the institution's insurance status on the FDIC or NCUA website.

How to compare CD rates across banks

You do not have to visit each bank's website individually. Several websites aggregate CD rates from many banks and let you filter by term, rate, and bank type. Bankrate, DepositAccounts, and CD Ladder are common tools. These sites show current rates and let you sort by highest rate or by specific term length.

When you find a rate you want, the website usually links directly to the bank's application. You can also go straight to the bank's website and apply there. The rates shown on comparison sites are typically updated daily, so a rate you see in the morning may change by afternoon.

Opening a CD in person versus online

If you open a CD at a bank branch, you bring a government-issued ID and the money you want to deposit (or arrange a transfer from another account). The banker will show you the available terms and rates, answer questions, and complete the paperwork. This takes 15 to 30 minutes. You leave with a receipt and the CD is active.

Opening online is faster. You create an account on the bank's website or app, choose your term and deposit amount, and fund it by transferring money from another bank account you own. The transfer usually takes one to three business days to complete, and the CD begins earning interest once the money arrives. You receive a confirmation email with the CD details.

The choice between in-person and online depends on your comfort with technology and whether you want to ask questions face-to-face. The CD itself works the same way either route.

What happens after you buy the CD

Once your CD is open, your money is locked in for the term you chose. You cannot withdraw it without a penalty. The bank pays interest either monthly, quarterly, or at maturity (when the term ends), depending on the CD. Some banks add interest to the CD itself; others deposit it into a linked savings account.

When the term ends, the bank sends you a notice. You then have a choice: let the CD renew automatically at the bank's current rate for another term of the same length, or withdraw the money and the interest you earned. If you do nothing, most banks automatically renew. You can prevent this by contacting the bank before the maturity date and asking them not to renew.

Special CD types at some banks

Beyond standard CDs, some banks offer variations. A bump-up CD lets you request one rate increase during the term if rates rise. A no-penalty CD lets you withdraw your money early without a penalty, though the rate is usually lower than a standard CD. A high-yield CD is simply a standard CD with a higher rate, usually at an online bank.

These options exist at some banks but not others. If one appeals to you, search for it specifically—not all banks offer all types. The trade-off is usually a lower rate in exchange for flexibility.

Frequently Asked Questions

Can I open a CD if I do not have a bank account?

Yes. You can open a CD as your first account with a bank or credit union. You will need a government-issued ID and the money to deposit. Some banks require a minimum deposit—often $500 to $2,500—to open a CD, though some online banks have lower minimums.

Is my money safe in a CD at an online bank?

Yes, as long as the online bank is FDIC-insured. Check the FDIC website to confirm. Your deposit is protected up to $250,000, the same as at a traditional bank. Online banks are regulated the same way as brick-and-mortar banks.

What if I need my money before the CD matures?

You can withdraw it, but you will pay an early withdrawal penalty. The penalty amount varies by bank and term length—it might be three months of interest or a percentage of your deposit. Some banks charge more for longer terms. A no-penalty CD avoids this, though the rate is lower.

Do I have to buy a CD from the bank where I have my checking account?

No. You can buy a CD from any bank or credit union, even if you have never done business with them before. Many people shop around for the best rate and open CDs at different banks to maximize their earnings.

How do I know if a bank is safe?

Check whether it is FDIC-insured (for banks) or NCUA-insured (for credit unions) on their respective websites. You can also look up the bank's regulatory history on the Federal Reserve's website or the Office of the Comptroller of the Currency. FDIC and NCUA insurance means your deposit is protected even if the institution fails.