Banks, credit unions, and brokerages all sell CDs, and the rate you get depends on where you buy

You can buy a certificate of deposit from a bank, a credit union, or an investment brokerage. Each type of seller offers different rates, terms, and features. Banks and credit unions typically offer CDs directly to customers through branches or online platforms. Brokerages let you buy CDs from multiple issuers in one account, which can make comparing rates easier if you're buying several at once.

The rate you receive varies significantly between institutions and changes daily. A CD paying 4.5% at one bank might pay 5.2% at another, or 5.0% through a brokerage. Shopping around before you commit your money is the only way to know whether you're getting a competitive rate.

Key Takeaways

  • Banks and credit unions sell their own CDs directly; brokerages sell CDs issued by multiple banks and credit unions in one place.
  • CD rates vary by institution and change daily, so comparing rates across at least three sellers before buying is worth the time.
  • Online banks typically offer higher rates than brick-and-mortar banks, though both are FDIC-insured up to $250,000 per account.
  • Brokered CDs offer more flexibility to buy and sell before maturity, but may charge fees and have different tax reporting than bank CDs.
  • Credit unions often offer competitive rates to members and may have lower minimum deposit requirements than banks.

Banks: Traditional and online options

Most people buy CDs from the bank where they already have a checking or savings account. You can walk into a branch, call, or log into your online banking portal and purchase a CD in minutes. The bank holds the CD in your account, and the interest is deposited automatically when the term ends.

Online banks—institutions with no physical branches—consistently offer higher CD rates than traditional banks. They have lower overhead costs and pass some of that savings to customers through better rates. Examples include Ally Bank, Marcus by Goldman Sachs, and American Express Personal Savings, though many others exist. You open an account online, fund it by transfer, and buy the CD through the same website.

All bank CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account holder per bank. If you have $500,000 to invest, you can split it between two banks and keep full coverage on both. The FDIC insurance applies regardless of whether the bank is online or has branches.

Credit unions: Member-only access

Credit unions are member-owned financial institutions that often offer competitive CD rates. You must be a member to buy a CD from a credit union, which usually means living or working in a specific area, belonging to an employer, or joining an affinity group. Some credit unions have opened membership to anyone in the United States.

Credit union CDs are insured by the National Credit Union Administration (NCUA), which provides the same $250,000 per account coverage as FDIC insurance. Rates at credit unions can be higher than at traditional banks, and minimum deposits are sometimes lower. If you're already a member, checking your credit union's CD rates takes five minutes and may save you money compared to your current bank.

Brokerages: Comparing multiple issuers at once

Investment brokerages like Fidelity, Charles Schwab, and Vanguard sell CDs issued by hundreds of banks and credit unions. Instead of visiting ten different websites to compare rates, you can see all available CDs in one place, sorted by rate, term, and issuer. You buy the CD through your brokerage account, and the brokerage handles the paperwork with the issuing bank.

Brokered CDs offer one major advantage: you can sell them before maturity on the secondary market if you need the money. A traditional bank CD locks your money until the term ends, or you pay an early withdrawal penalty. With a brokered CD, you can sell it to another investor, though the price you receive depends on interest rate movements and may be more or less than you paid.

Brokered CDs are still insured by the FDIC or NCUA depending on the issuer, but the insurance applies to the issuing bank, not the brokerage. If you buy a CD from Bank A through Fidelity, the FDIC insures it up to $250,000 at Bank A. If you also have a savings account at Bank A, the two accounts share the same $250,000 limit. Brokered CDs may also have different tax reporting than bank CDs, so confirm with your brokerage how interest will be reported to the IRS.

How to compare rates across sellers

Start by checking the rates at your current bank or credit union. Then visit at least two online banks and one brokerage. Write down the rate, term length, and minimum deposit for each option. The difference between a 4.5% CD and a 5.2% CD on $10,000 for one year is $70—enough to justify spending 15 minutes comparing.

Rate comparison websites like Bankrate, DepositAccounts, and CD Ladder show current rates from multiple banks, though they don't cover every institution. These sites update daily and let you filter by term length and minimum deposit. Use them as a starting point, then visit the issuer's website directly to confirm the rate and open an account.

Pay attention to the annual percentage yield (APY), not the interest rate. APY accounts for how often interest is compounded and gives you the true return on your money. A CD advertising 5.0% APY will earn you exactly 5.0% per year, while one advertising 5.0% interest compounded monthly may earn slightly more or less depending on the compounding schedule.

Minimum deposits and account requirements

Most banks require a minimum deposit to open a CD, typically between $500 and $2,500. Some online banks have minimums as low as $100 or $250. Credit unions often have lower minimums than banks, sometimes $500 or less. A few institutions offer no-minimum CDs, though these are less common.

Some banks require you to have a checking or savings account with them before you can buy a CD. Others let you open a CD account without any other relationship. If you're comparing banks, check whether you need an existing account—it may affect your decision if you don't want to maintain multiple accounts.

Special CD types and where to find them

Most CDs have a fixed rate and a set term—you know exactly what you'll earn. Some banks offer bump-up CDs, which let you increase the rate once if rates rise during your term. Others offer step-up CDs, which automatically increase the rate at set intervals. These specialty CDs usually have slightly lower starting rates than standard CDs, so compare the total return, not just the opening rate.

High-yield savings accounts are not CDs, but they're worth considering if you want flexibility. They pay interest like a CD but let you withdraw money anytime without penalty. Rates on high-yield savings accounts are often competitive with CD rates, and you don't lock your money away. Banks and brokerages both offer them.

Frequently Asked Questions

Can I buy a CD from a bank I don't have an account with?

Yes. Most banks let you open a CD account without having a checking or savings account. You can fund it by wire transfer or ACH transfer from another bank. Some banks require an existing account, so check their website or call before you start the process.

Is a CD safer at a bank or a brokerage?

Both are equally safe from an insurance standpoint. Bank CDs are insured by the FDIC or NCUA up to $250,000. Brokered CDs are also insured by the FDIC or NCUA based on the issuing bank. The difference is that brokered CDs can be sold before maturity, which introduces market risk if you need to sell when rates have risen.

What's the difference between a CD rate and APY?

APY (annual percentage yield) is the rate you'll actually earn after accounting for how often interest is compounded. Interest rate is the base percentage before compounding. Always compare APY to APY, not rate to APY, to see the true return on your money.

Do I have to buy a CD in person at a branch?

No. You can buy a CD online from any bank or credit union that offers online banking, and from any brokerage. You can also buy by phone. In-person purchases at a branch are an option, but not required.

Can I move a CD from one bank to another?

You cannot transfer a CD directly. When your CD matures, you can withdraw the money and buy a new CD at a different bank. If you own a brokered CD, you can sell it on the secondary market before maturity, though the price depends on interest rate movements.