The basic steps to buy a CD on Charles Schwab

To buy a CD on Charles Schwab, log into your account, go to the Investing tab, select Fixed Income, then CDs. Choose the term length and rate you want, enter the amount you're depositing, and confirm the purchase. The CD will be held in your account and mature on the date Schwab shows you at purchase. You need a funded brokerage or bank account with Schwab to complete the transaction — you cannot buy a CD without money already in the account.

The entire process takes about five minutes once you're logged in. Schwab shows you the current rates for different term lengths (3 months, 6 months, 1 year, 2 years, and so on) before you commit. You can see the maturity date and the exact amount you'll receive when the CD matures. If you change your mind before confirming, you can back out at any step.

Key Takeaways

  • You access CDs through the Investing tab, then Fixed Income, then CDs — not through the banking side of Schwab.
  • Schwab shows you the rate and maturity date before you buy, so you know exactly what you're getting.
  • The money you deposit must already be in a Schwab account; you cannot fund a CD purchase directly from an outside bank.
  • CDs bought through Schwab's brokerage platform are FDIC-insured up to $250,000 per depositor, per institution.

Where to find CDs in your Schwab account

Log into your Schwab account and look for the Investing tab at the top of the page. Click it, then select Fixed Income from the menu. You'll see options for Bonds, Bond Funds, and CDs. Click on CDs to see what's currently available.

Schwab updates CD rates throughout the day as market conditions change. The rates you see are live rates available right now. If you wait an hour or a day, the rates may be different — usually lower, but sometimes higher. The term lengths Schwab offers are typically 3 months, 6 months, 1 year, 2 years, 3 years, 5 years, and 10 years, though the exact options can vary.

Choosing a term length and deposit amount

The term length is how long your money stays locked in the CD. A 1-year CD means your money is tied up for one year; a 5-year CD means five years. Longer terms usually pay higher rates, but you cannot withdraw the money early without paying a penalty. Schwab shows you the penalty amount before you buy — it's typically a certain number of months of interest, depending on the term.

Once you pick a term, enter the amount you want to deposit. You can deposit any amount from your available cash balance in your Schwab account, up to the FDIC insurance limit. Schwab will show you the maturity date (the exact day your CD matures) and the total amount you'll receive, including interest. Review these numbers carefully before you confirm.

Understanding FDIC insurance on Schwab CDs

CDs bought through Schwab's brokerage platform are FDIC-insured. The insurance limit is $250,000 per depositor, per institution. This means if you buy a $250,000 CD through Schwab, the full amount is protected if Schwab fails. If you buy multiple CDs at Schwab totaling more than $250,000, only $250,000 is insured across all of them.

If you also have a Schwab savings account or money market account, those are insured separately from CDs. Each account type gets its own $250,000 protection. So you could have a $250,000 CD and a $250,000 savings account at Schwab, and both would be fully insured. The FDIC website has a calculator if you want to check your coverage across multiple accounts and institutions.

What happens when your CD matures

On the maturity date, Schwab automatically deposits the principal plus interest into your account as cash. You do not have to do anything. The money sits in your account as available cash that you can withdraw, invest, or use to buy another CD.

Schwab does not automatically roll your CD into a new one. If you want to buy another CD when this one matures, you'll need to go back to the Fixed Income section and start the process again. Some banks auto-renew CDs, but Schwab does not, so mark your calendar if you want to reinvest the money.

Early withdrawal and penalties

If you need to withdraw money from your CD before the maturity date, Schwab will let you, but you'll pay a penalty. The penalty is shown before you buy the CD — it's usually expressed as a number of months of interest. For example, a 1-year CD might have a 3-month interest penalty, meaning you lose three months' worth of interest if you withdraw early.

The penalty comes out of your interest earnings first. If you've earned less interest than the penalty amount, the difference comes out of your principal. Before you withdraw early, call Schwab or log in and check the exact penalty for your specific CD, because it varies by term length and the rate you locked in.

Comparing Schwab CD rates to other banks

Schwab's CD rates are competitive but not always the highest available. Online banks and credit unions sometimes offer higher rates, especially for longer terms. Before you buy, check what other institutions are offering for the same term length. Schwab's advantage is convenience — you can buy a CD in the same account where you keep your stocks and bonds — but that convenience may cost you a slightly lower rate.

Schwab also offers no-penalty CDs, which let you withdraw your money early without a penalty, though the rate is lower than a traditional CD. If you think you might need the money before maturity, a no-penalty CD might be worth the lower rate, or you might choose a shorter term instead.

Frequently Asked Questions

Can I buy a CD with money from an outside bank?

No. The money must already be in your Schwab account. You'll need to transfer funds from your outside bank to Schwab first, which usually takes one to three business days. Once the transfer settles, you can use that cash to buy a CD.

What if I need my money before the CD matures?

You can withdraw it, but you'll pay an early withdrawal penalty. The penalty is shown before you buy. It's usually a few months of interest, but it varies by term length. Call Schwab or check your CD details online to see the exact penalty before you withdraw.

Do I have to reinvest the money when my CD matures?

No. When your CD matures, the principal and interest are deposited as cash in your account. You can leave it there, withdraw it, invest it, or buy a new CD — whatever you choose. Schwab does not automatically roll it into a new CD.

Are Schwab CDs insured if the bank fails?

Yes. CDs at Schwab are FDIC-insured up to $250,000 per depositor. If you have multiple CDs totaling more than $250,000, only $250,000 is covered. Savings accounts and other account types are insured separately.

Can I sell my CD before it matures instead of withdrawing it?

CDs bought through Schwab's brokerage platform cannot be sold on the secondary market the way bonds can. Your only option to access the money early is to withdraw it and pay the penalty. If you think you might need liquidity, consider a shorter-term CD or a no-penalty CD instead.