What Marcus CDs offer and how their rates compare

Marcus, the online banking arm of Goldman Sachs, offers certificates of deposit (CDs) with rates that change based on how long you lock your money away and current market conditions. Unlike a savings account where you can withdraw money anytime, a CD requires you to keep your deposit untouched for a set period — typically three months to five years — in exchange for a fixed interest rate. Marcus publishes its current CD rates on its website, and those rates shift weekly or more often depending on Federal Reserve decisions and competition from other banks.

CD rates across all banks, including Marcus, move together because they track the federal funds rate set by the Federal Reserve. When the Fed raises rates, banks raise CD rates. When the Fed cuts rates, CD rates fall. Marcus historically has offered rates at or above the national average for online banks, but you should compare its current rates against other online banks like Ally, American Express, and Discover before deciding where to open a CD.

The trade-off is simple: you get a higher interest rate than a savings account, but you lose access to your money for the term you choose. If you withdraw early, Marcus charges an early withdrawal penalty that reduces your earnings or eats into your principal.

Key Takeaways

  • Marcus CD rates are fixed for the term you choose and change based on Federal Reserve policy, not on Marcus's decisions alone.
  • Longer CD terms (like five years) typically pay higher rates than shorter ones (like three months), though this is not always true.
  • If you withdraw money before the CD matures, Marcus charges an early withdrawal penalty that varies by term length.
  • You can open a Marcus CD online with a minimum deposit, and interest compounds daily and is credited at maturity.
  • Marcus CDs are FDIC-insured up to $250,000 per account holder, so your principal is protected even if the bank fails.

How Marcus CD terms and rates are structured

Marcus offers CDs in several standard terms: three months, six months, one year, two years, three years, and five years. Each term has its own interest rate, and longer terms almost always pay more than shorter ones — though occasionally when the Fed is cutting rates, a one-year CD might pay slightly more than a two-year CD. You choose the term when you open the CD, and that rate is locked in for the entire period.

Interest on Marcus CDs compounds daily, meaning the bank calculates interest on your principal plus any interest already earned. At the end of the CD term (called maturity), the full amount — principal plus all accrued interest — is deposited into your Marcus savings account or transferred to an external bank account you specify. You then decide whether to open a new CD, move the money to savings, or withdraw it.

Marcus does not charge a monthly fee to hold a CD, and there is no minimum balance requirement to keep an account open once the CD matures. The only cost is the early withdrawal penalty if you need the money before the term ends.

Early withdrawal penalties and what they cost

Marcus charges an early withdrawal penalty if you close a CD before maturity. The penalty amount depends on the CD term: shorter-term CDs (three and six months) have smaller penalties, while longer-term CDs (three and five years) have larger ones. Marcus publishes its penalty schedule on its website, and you can see the exact penalty for each term before you open the CD.

The penalty is deducted from your CD balance, which means it can reduce your interest earnings or, in some cases, reduce your principal if you withdraw very early. For example, if you open a five-year CD with a $10,000 deposit and withdraw after six months, the penalty might be several months' worth of interest, leaving you with less than $10,000. This is why CDs work best when you know you will not need the money for the full term.

Some banks offer "no-penalty CDs" with lower rates but no early withdrawal fee. Marcus does not currently offer this product, so if flexibility is important to you, compare Marcus against banks that do.

How to open a Marcus CD and what happens at maturity

You open a Marcus CD entirely online through the Marcus website or mobile app. You will need to provide your name, address, Social Security number, and employment information. If you already have a Marcus savings account, the process is faster because Marcus already has your identity verified. If you are new to Marcus, you will need to link an external bank account to fund the CD — Marcus does not accept wire transfers or checks.

Once your CD is open, you cannot add money to it or withdraw money from it until maturity, with the exception of the early withdrawal option (which triggers the penalty). You can watch your balance grow on the Marcus app, and you will receive a statement showing how much interest has accrued.

When the CD reaches maturity, Marcus automatically deposits the full balance into your linked Marcus savings account. You then have a grace period (usually 10 days) to decide what to do next: open a new CD at the current rate, leave the money in savings, or transfer it out. If you do nothing, the money stays in your savings account earning the savings rate, which is typically lower than CD rates.

FDIC insurance and what it protects

Marcus CDs are FDIC-insured, which means the Federal Deposit Insurance Corporation guarantees your deposit up to $250,000 per account holder per bank. This protection covers your principal and all accrued interest. If Marcus were to fail, the FDIC would return your money up to that limit.

The $250,000 limit applies per person per bank, so if you have both a Marcus CD and a Marcus savings account, they count toward the same $250,000 limit. If you have more than $250,000 to invest in CDs, you can open accounts at different banks to spread your deposits and keep everything insured.

FDIC insurance does not protect you against early withdrawal penalties or against the risk that CD rates will fall after you lock in your rate. It only protects your money if the bank fails.

Comparing Marcus CD rates to other banks

Marcus CD rates move in line with rates at other online banks, but the exact rate can differ by 0.10% to 0.50% depending on how aggressively each bank is competing for deposits. You should check Marcus's current rates against Ally Bank, American Express Personal Savings, Discover Bank, and LendingClub before opening a CD, because the difference compounds over time.

For example, if you deposit $10,000 in a one-year CD at 4.50% versus 5.00%, you earn $50 more in interest over the year. On a five-year CD, the difference is much larger. Rate comparison sites like Bankrate and DepositAccounts track CD rates across banks and update them daily, so you can see where Marcus stands in real time.

Keep in mind that promotional rates sometimes apply to new customers, and some banks offer higher rates on specific terms (like a "special" five-year rate). Read the fine print to understand whether the rate you see applies to you and whether it is may provide for the full term.

When a Marcus CD makes sense for your money

A Marcus CD works well if you have money you will not need for several months or years and you want a may provide return that beats savings account rates. CDs are predictable: you know exactly how much you will earn before you open the account, and that amount does not change. This makes CDs useful for saving toward a specific goal with a known timeline — like a down payment in two years or a vacation in one year.

CDs are not the right choice if you might need the money before the term ends, because the early withdrawal penalty will reduce your earnings. They are also not ideal if you think interest rates will rise significantly, because you will be locked into a lower rate. In a rising-rate environment, a shorter-term CD (like three or six months) lets you reinvest at a higher rate sooner.

If you want the safety and predictability of a CD but need some flexibility, look for banks offering no-penalty CDs or consider splitting your money between a CD and a high-yield savings account.

Frequently Asked Questions

Can I withdraw my money from a Marcus CD before it matures?

Yes, but Marcus charges an early withdrawal penalty that reduces your earnings or principal. The penalty amount depends on the CD term — longer terms have larger penalties. You can see the exact penalty for each term on Marcus's website before you open the CD.

What happens to my money when the CD reaches maturity?

Marcus automatically deposits the full balance (principal plus interest) into your linked Marcus savings account. You then have about 10 days to decide whether to open a new CD, leave the money in savings, or transfer it to another bank. If you do nothing, the money stays in savings at the lower savings rate.

Are Marcus CDs safe if the bank fails?

Yes. Marcus CDs are FDIC-insured up to $250,000 per account holder, so the Federal Deposit Insurance Corporation will return your money if Marcus fails. This protection covers both your principal and all accrued interest.

How often do Marcus CD rates change?

Marcus updates its CD rates weekly or more often in response to Federal Reserve decisions and market conditions. The rate you lock in when you open a CD stays the same for the entire term, regardless of whether rates rise or fall later.

Can I add money to my CD after I open it?

No. Once a CD is open, you cannot deposit additional money into it. If you want to add more to your CD savings, you must open a separate CD. You can, however, keep money in a Marcus savings account alongside your CDs.