Yes, you can sell CDs on Fidelity, but the process depends on the type of CD and whether it's held in a brokerage or bank account

Fidelity offers two different ways to hold CDs, and each one has different rules for selling. If you own a CD through Fidelity's brokerage account, you can sell it on the secondary market before maturity — meaning you can cash out early without waiting for the CD to reach its end date. If you own a CD through Fidelity's bank products (issued by Fidelity Bank), you generally cannot sell it; you can only hold it until maturity or withdraw early and pay a penalty.

The key difference is that brokerage CDs are tradable securities, while bank CDs are deposit products. Understanding which type you own matters because it determines whether you have the option to sell at all, and what price you might receive if you do.

Key Takeaways

  • Brokerage CDs purchased through Fidelity can be sold on the secondary market before maturity, but the price you receive depends on current interest rates and market conditions.
  • Bank CDs issued by Fidelity Bank cannot be sold; you can only hold them until maturity or withdraw early and pay the penalty stated in your CD agreement.
  • When you sell a brokerage CD early, you may receive more or less than you paid, depending on whether interest rates have risen or fallen since you bought it.
  • Selling a brokerage CD does not trigger an early withdrawal penalty, but you will realize a gain or loss on the sale that affects your taxes.

How to sell a brokerage CD on Fidelity

If your CD is held in a Fidelity brokerage account, you sell it the same way you would sell any other security. Log into your account, find the CD in your holdings, and place a sell order. Fidelity will list the CD on the secondary market, and the order will execute when a buyer is found at your asking price or better.

The price you receive depends on the current interest rate environment. If interest rates have fallen since you bought the CD, the CD becomes more valuable and you may sell it for more than you paid. If interest rates have risen, the CD becomes less valuable and you may sell it for less than you paid. This is because buyers compare the CD's fixed rate to what they could earn in new CDs at current rates.

You can place the sell order during market hours. Fidelity does not charge a commission to sell a CD, but the bid-ask spread (the difference between what buyers will pay and what sellers are asking) is built into the price you receive.

Why the price of a brokerage CD changes when you sell it

A CD's market value moves in the opposite direction of interest rates. This is true for all fixed-rate bonds and bond-like securities, including CDs. When the Federal Reserve raises interest rates, newly issued CDs offer higher rates, which makes older CDs with lower rates worth less. When the Federal Reserve lowers interest rates, newly issued CDs offer lower rates, which makes older CDs with higher rates worth more.

For example, if you bought a one-year CD at 4.5% and interest rates have since risen to 5.5%, a buyer would rather hold a new CD at 5.5% than buy your 4.5% CD at par value. To make the sale, you would have to discount the price. The reverse is true if rates have fallen: your 4.5% CD is now more attractive than new CDs paying 3.5%, so you might sell it at a premium.

The longer the CD's remaining term, the larger the price swing tends to be when rates change. A five-year CD is more sensitive to rate changes than a one-year CD.

What happens when you sell a brokerage CD versus letting it mature

When you sell a brokerage CD before maturity, you do not pay an early withdrawal penalty. Instead, you realize a capital gain or loss on the sale. If you sold the CD for more than you paid, you have a capital gain; if you sold it for less, you have a capital loss. Both are reported on your tax return.

If you let the CD mature, you straightforward receive your principal back plus the accrued interest, with no gain or loss to report (unless you bought the CD at a discount, which is less common). Holding to maturity is simpler from a tax perspective, but it locks you into the CD's rate for the full term.

Selling early gives you flexibility to move money if your needs change or if you want to reinvest at a higher rate. The trade-off is that you may take a loss if rates have risen and you need the cash before the CD matures.

Bank CDs through Fidelity cannot be sold

If your CD is a Fidelity Bank CD (sometimes labeled as a "bank CD" or "deposit CD" in your account), you cannot sell it on the secondary market. These are bank deposit products, not securities, and they are not tradable.

With a bank CD, your only options are to hold it until maturity or withdraw early. If you withdraw early, you pay an early withdrawal penalty as stated in your CD agreement. The penalty is usually a certain number of months of interest, and it varies by CD term and the bank's policy.

To find out which type of CD you own, log into your Fidelity account and look at the security type or product description. Brokerage CDs are often labeled with the issuing bank's name and the CD term (for example, "Bank of America CD 2.50% due 2025"). Bank CDs issued by Fidelity are labeled as Fidelity Bank CDs or deposit CDs.

How to check if your CD can be sold before maturity

The easiest way to know whether your CD is sellable is to look at your account holdings. If the CD appears in your brokerage account alongside stocks and mutual funds, it is likely a brokerage CD and can be sold. If it appears in a separate bank or deposit section, it is likely a bank CD and cannot be sold.

You can also call Fidelity's customer service and ask directly. Have your CD's CUSIP number or account statement handy. They can tell you whether the CD is tradable and, if it is, what the current bid and ask prices are.

If you are thinking about selling, ask Fidelity for a quote before you decide. The quote will show you the price you would receive if you sold right now, which helps you weigh whether selling makes sense compared to holding to maturity.

Tax implications of selling a CD early

When you sell a brokerage CD at a gain, the gain is taxed as a capital gain. The tax rate depends on how long you held the CD. If you held it for less than one year, it is a short-term capital gain and is taxed at your ordinary income rate. If you held it for more than one year, it is a long-term capital gain and is taxed at the lower long-term capital gains rate (0%, 15%, or 20%, depending on your income).

If you sell at a loss, you can use the loss to offset other capital gains or, up to $3,000 of ordinary income per year. Any loss beyond that can be carried forward to future years.

Interest accrued on the CD up to the sale date is always taxed as ordinary income, regardless of whether you sold at a gain or loss. Fidelity will report the gain or loss and the accrued interest on Form 1099-B and Form 1099-INT, which you receive by January 31 of the following year.

Frequently Asked Questions

Can I sell a CD I bought from another bank if I transferred it to Fidelity?

It depends on whether the CD is held in a brokerage account or a bank account at Fidelity. If it was transferred into a brokerage account, it can be sold. If it was transferred into a bank deposit account, it cannot be sold. Contact Fidelity to confirm which type of account holds your CD.

What if I sell my CD and interest rates fall after the sale?

Once you sell, you no longer own the CD and have no claim to its future interest payments. The buyer receives all remaining interest. If you want to reinvest the proceeds, you would buy a new CD at the current (lower) rate, which would be less attractive than the CD you sold.

Does selling a CD count as an early withdrawal for tax purposes?

No. Selling a brokerage CD is a sale of a security, not a withdrawal. You do not pay an early withdrawal penalty. However, you do report any capital gain or loss on your tax return, which is different from the tax treatment of an early withdrawal from a bank CD.

Can I sell only part of a CD?

No. CDs are sold as whole units. You must sell the entire CD or none of it. If you need only part of the money, you would have to sell the whole CD and reinvest the portion you do not need in a new CD or other investment.

How long does it take to receive the money after I sell a CD?

Settlement typically occurs two business days after the sale. The cash will appear in your Fidelity account and is available to withdraw or reinvest after settlement is complete.