Banks and credit unions are the most common places to buy a CD

You can open a CD at almost any bank or credit union that offers them. The largest national banks — Bank of America, Chase, Wells Fargo, Citibank — all sell CDs, as do thousands of smaller regional and community banks. Credit unions, which are member-owned financial institutions, also offer CDs and sometimes pay higher rates than banks do.

The process is straightforward: you visit the bank or credit union in person, call their customer service line, or go to their website and open a CD online. You choose how much money to deposit and how long you want to lock it away — typically anywhere from three months to five years. The bank tells you the interest rate you'll earn, and you fund the CD with a transfer from your checking or savings account.

Your choice of where to buy matters because rates vary significantly. A CD paying 4.5% at one bank might pay 3.8% at another, even for the same term. Over a year or two, that difference adds up.

Key Takeaways

  • National banks, regional banks, and credit unions all offer CDs, but rates differ between institutions, so comparing before you buy saves money.
  • Online banks typically pay higher CD rates than brick-and-mortar banks because they have lower overhead costs.
  • You can open a CD online, by phone, or in person at a branch, and you fund it by transferring money from an existing account at that institution.
  • CDs are insured up to $250,000 per depositor per bank through the FDIC (or NCUA at credit unions), so your money is protected even if the institution fails.
  • Some banks let you open a CD with as little as $500 or $1,000, while others require $10,000 or more as a minimum deposit.

Online banks often offer the highest CD rates

Online banks — institutions with no physical branches, like Marcus by Goldman Sachs, Ally Bank, American Express Bank, and Discover Bank — typically offer higher CD rates than traditional banks. Because they don't maintain branch networks, their operating costs are lower, and they pass some of that savings to customers in the form of better rates.

Opening a CD at an online bank works the same way as at a traditional bank: you visit their website, enter your information, choose your term and deposit amount, and fund the CD from an external account. The entire process usually takes 10 to 15 minutes. You manage the CD through the bank's website or mobile app.

The trade-off is that you cannot walk into a branch to ask questions or handle problems in person. If you prefer face-to-face service or have complex questions, a local bank or credit union may be a better fit, even if the rate is slightly lower.

Brokerage firms and investment platforms offer CDs too

Brokerage firms like Fidelity, Charles Schwab, and E-Trade allow you to buy CDs through their platforms. These are the same CDs issued by banks — you're not buying a different product — but the brokerage acts as an intermediary. The CD is still insured by the FDIC up to $250,000.

The advantage of buying through a brokerage is convenience if you already have an account there. You can see your CD alongside your stocks, bonds, and other investments in one dashboard. Some brokerages also offer a wider selection of CDs from different banks, making it easier to compare rates without visiting multiple websites.

The disadvantage is that brokerages may charge a small fee to buy or sell a CD before maturity, whereas buying directly from the bank usually does not. If you plan to hold the CD until it matures, this fee does not affect you.

How to compare CD rates across institutions

Because rates vary, spending 15 minutes comparing before you buy is worth the effort. Start by checking the rates at your current bank or credit union — many people get a small loyalty bonus for opening a CD there. Then visit two or three online banks and check their rates for the same term you're considering.

Write down the rate, the term length, and the minimum deposit for each option. A rate that looks good today may not be the best tomorrow, so check rates on the day you plan to fund the CD. Some banks also offer promotional rates for new customers, so read the fine print to see whether the rate you see applies to you.

Pay attention to the annual percentage yield (APY), not just the interest rate. The APY accounts for how often interest is compounded and shows you the true return you'll earn over a year. Two CDs with the same stated rate might have different APYs depending on how the bank compounds interest.

Minimum deposits and account requirements vary by institution

Most banks require a minimum deposit to open a CD, but the amount differs. Some online banks let you open a CD with $500 or $1,000. Others, particularly some credit unions and regional banks, require $2,500, $5,000, or even $10,000 as a minimum. A few banks have no minimum at all.

Before you choose a bank, check whether you have enough to meet its minimum. If you don't, you may need to save a bit longer or choose a different institution. Some banks also require that you have an existing checking or savings account with them before you can open a CD, while others let you open a CD as your first account.

Read the fine print on the bank's website or call customer service to confirm the minimum deposit and any account requirements. This information is usually straightforward to find on the CD product page.

What happens when your CD matures

When your CD reaches its maturity date, the bank stops paying you the locked-in rate and moves your money to a regular savings account (or another account type you choose). At that point, you have a few options: you can withdraw the money, move it to a different bank, or open a new CD at the same bank or elsewhere.

Most banks give you a grace period — usually 7 to 10 days — after maturity to decide what to do. If you don't take action during that window, the bank will automatically renew your CD for another term at whatever the current rate is. That new rate may be higher or lower than what you earned before, so if you want to shop around, act before the grace period ends.

Mark your calendar for a few days before your CD matures so you have time to compare rates and decide whether to stay with your current bank or move your money elsewhere.

Frequently Asked Questions

Can I open a CD if I don't have a checking account at that bank?

Most banks let you open a CD without an existing account, but some require one. Check the bank's website or call before you start the process. If a bank requires a checking account, you may need to open that first, which takes an extra day or two.

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

Yes. Online banks are insured by the FDIC just like traditional banks. Your CD is protected up to $250,000 per depositor per bank, so as long as you stay under that limit, your money is safe even if the bank fails.

What if I need my money before the CD matures?

You can withdraw it, but most banks charge an early withdrawal penalty — typically a few months' worth of interest. The penalty varies by bank and by CD term. Before you open a CD, ask what the penalty is so you know the cost if you need the money early.

Do I have to open a CD in person?

No. Most banks let you open a CD entirely online or by phone. You fund it by transferring money from another account, and you manage it through the bank's website or app. In-person opening is an option if you prefer it, but it's not required.

Can I buy a CD with money from another bank?

Yes. You can transfer money from a checking or savings account at any bank to fund a CD at a different bank. The transfer usually takes one to three business days. Some banks also accept cashier's checks or wire transfers if you prefer not to use an electronic transfer.