What TD Bank charges for certificates of deposit
TD Bank offers certificates of deposit (CDs) with rates that change based on the term length you choose and the current market. As of your search, you'll need to check TD Bank's website or call a branch directly for today's rates, because CD rates shift weekly or even daily depending on what the Federal Reserve does and what other banks are offering.
A CD is a savings account where you agree to leave your money untouched for a set period — typically three months to five years — in exchange for a may provide interest rate. TD Bank's rates vary by term: a three-month CD will pay less than a one-year CD, which will pay less than a five-year CD. The longer you lock your money away, the higher the rate usually is, because the bank gets to use your money for longer.
The catch is that if you withdraw your money before the term ends, TD Bank charges an early withdrawal penalty. That penalty varies by CD term — a shorter-term CD has a smaller penalty, and a longer-term CD has a larger one. You need to know the penalty amount before you open the account, because it can wipe out your interest earnings if you need the money early.
Key Takeaways
- TD Bank's CD rates depend on the term length and change frequently, so you must check their current rates directly rather than relying on rates you saw last week.
- Early withdrawal penalties vary by CD term and can eliminate your interest earnings, so confirm the penalty before you commit your money.
- Longer CD terms (one year, three years, five years) typically pay higher rates than shorter terms (three months, six months), but lock your money away for longer.
- You can compare TD Bank's CD rates to other banks' rates to see whether TD offers competitive terms for the time frame you need.
How to find TD Bank's current CD rates
Go to TD Bank's website and look for the "Rates" or "CDs" section, usually found under savings products. You'll see a table showing the rate for each term length. The rate shown is the annual percentage yield (APY), which is what you actually earn per year after the bank compounds the interest.
If you don't want to search online, call a TD Bank branch directly or visit in person. A banker can tell you the rates for all available terms and explain the early withdrawal penalty for each one. This is also the time to ask whether TD is running any promotions — some banks offer higher rates for new customers or for larger deposits.
Write down the rates and penalties for each term you're considering. You'll use this information to decide whether a TD CD makes sense for your money, or whether another bank's CD would serve you better.
Comparing TD Bank CDs to other banks
TD Bank's rates are not always the highest available. Online banks and credit unions often pay more than brick-and-mortar banks because they have lower overhead costs. Before you open a CD at TD, check what other banks are offering for the same term.
Use a rate-comparison website to see CD rates across multiple banks at once. Look at banks you already use, banks in your area, and online banks. Pay attention to the early withdrawal penalty as well as the rate — a slightly higher rate doesn't help if the penalty is so steep that you can't afford to access your money if an emergency happens.
Also consider whether you want the CD at a bank where you already have a checking account. Some people prefer to keep everything in one place, even if the rate is slightly lower. Others prioritize the highest rate and don't mind opening an account at a new bank. Both approaches are reasonable — it depends on what matters to you.
Understanding CD terms and penalties
When you open a CD, you choose how long the money stays locked up. Common terms are three months, six months, one year, two years, three years, and five years. The term you pick affects two things: the interest rate you earn and the early withdrawal penalty if you need the money before the term ends.
TD Bank's early withdrawal penalty is usually expressed as a number of months of interest. For example, a one-year CD might have a penalty of three months of interest. If your CD is earning $100 per year and you withdraw after six months, you'd lose $25 in interest (three months' worth). If you withdraw after two months, you'd still lose $25, not a smaller amount — the penalty is the same no matter when you withdraw.
Read the CD disclosure document before you open the account. It will state the exact penalty in dollars or months of interest. If the penalty seems too high for your comfort, choose a shorter-term CD or look at another bank.
When a CD makes sense for your money
A CD is useful if you have money you won't need for a specific amount of time and you want a may provide return. For example, if you're saving for a down payment on a house and you know you'll have the money in two years, a two-year CD locks in a rate and protects you from market swings.
A CD is less useful if you might need the money before the term ends, because the early withdrawal penalty will cost you. It's also less useful if interest rates are rising and you think rates will be higher in a few months — you'll be stuck earning the lower rate you locked in today.
If you're unsure whether you can leave the money untouched for the full term, keep it in a regular savings account instead, even if the rate is lower. The flexibility is worth more than a slightly higher rate if you're likely to need the cash.
How CD interest is paid and taxed
TD Bank pays CD interest either monthly, quarterly, or at maturity, depending on the CD product. Some CDs add the interest to your account automatically; others require you to withdraw it. Check the disclosure to see how your specific CD works.
The interest you earn on a CD is taxable income. TD Bank will send you a 1099-INT form at the end of the year showing how much interest you earned. You'll report this on your tax return. If you're in a high tax bracket, the after-tax return on a CD might be lower than you expect, so factor that in when you're deciding whether the rate is worth it.
What happens when your CD matures
When your CD term ends, TD Bank will notify you that the CD has matured. At that point, you have a choice: withdraw the money, or let it roll over into a new CD at the current rate. If you do nothing, many CDs automatically renew into a new CD of the same term at whatever rate TD is offering at that time.
If rates have dropped since you opened your original CD, the new rate will be lower. If rates have risen, the new rate will be higher. You're not locked into the renewal rate — you can withdraw your money and move it elsewhere if you want. Just make sure you act within the grace period (usually seven to ten days) before the renewal happens automatically.
Frequently Asked Questions
Can I withdraw money from a TD Bank CD before it matures?
Yes, but you'll pay an early withdrawal penalty. The penalty is usually a set number of months of interest, stated in your CD disclosure. The penalty is the same whether you withdraw after one month or one day before maturity.
Is my money in a TD Bank CD protected if the bank fails?
Yes. CDs at TD Bank are covered by FDIC insurance up to $250,000 per depositor, per bank. If you have multiple CDs at TD Bank, the total coverage across all of them is $250,000, not $250,000 per CD.
What's the difference between a CD rate and APY?
APY (annual percentage yield) is the rate you actually earn after the bank compounds interest. The stated "rate" is sometimes lower because it doesn't account for compounding. Always look at the APY when comparing CDs, because that's the true return.
Do I have to open a CD at a TD Bank branch, or can I do it online?
You can do both. TD Bank allows you to open CDs online through their website or app, or in person at a branch. Online CDs are often easier and faster, but some people prefer to speak with a banker in person.
What happens if I need my CD money for an emergency?
You can withdraw it, but you'll lose some or all of your interest to the early withdrawal penalty. If the penalty is steep, you might come out behind compared to a regular savings account. This is why CDs work best for money you're confident you won't need.