You can sell CDs on Fidelity, but only if you bought them through Fidelity in the first place
Fidelity lets you sell certificates of deposit (CDs) you purchased from them before maturity, but you cannot sell CDs you bought elsewhere. When you sell a Fidelity CD early, you will pay an early withdrawal penalty — the amount depends on the CD's term and how much time remains before maturity. The sale happens in your brokerage account, and the proceeds go back into your cash balance within one to two business days.
If you own CDs from another bank or financial institution, you cannot move them to Fidelity to sell them there. You would need to contact the original issuer to sell or redeem them early. This matters because early withdrawal penalties vary widely by issuer, so it is worth checking the terms of your specific CD before you decide to sell.
Key Takeaways
- You can only sell CDs through Fidelity if you purchased them directly from Fidelity.
- Selling a CD before maturity triggers an early withdrawal penalty that reduces your proceeds.
- The penalty amount depends on the CD's original term and how much time is left until maturity.
- Proceeds from a CD sale appear in your cash balance within one to two business days.
- CDs purchased from other banks cannot be sold through Fidelity and must be redeemed with the original issuer.
How early withdrawal penalties work on Fidelity CDs
Fidelity's early withdrawal penalty is calculated as a certain number of months of interest, and the exact amount depends on the CD's term length. For example, a one-year CD might have a penalty equal to three months of interest, while a five-year CD might have a penalty equal to six months of interest. The longer the original term, the larger the penalty Fidelity charges for early withdrawal.
When you sell the CD, Fidelity subtracts the penalty from your principal and any accrued interest. You receive the remainder. If the CD has earned very little interest and the penalty is large, you could end up with less money than you originally deposited. Before you sell, Fidelity will show you the exact penalty amount and the net proceeds you will receive, so you can decide whether selling makes sense for your situation.
Steps to sell a CD through Fidelity
Log into your Fidelity account online or through the mobile app and navigate to your Positions or Holdings section. Find the CD you want to sell and select it. Fidelity will display the current value, the maturity date, and the early withdrawal penalty. Review these details carefully, because once you confirm the sale, the transaction cannot be undone.
Click the option to sell or redeem the CD early. Fidelity will ask you to confirm the transaction and show you the final amount you will receive after the penalty is deducted. Once you confirm, the CD is sold immediately. The cash proceeds will settle into your account's cash balance within one to two business days, and you can then use that money to buy other investments or withdraw it.
When it makes sense to sell a CD early
Selling a CD early usually makes sense only if interest rates have risen significantly since you bought it, or if you need the money for an emergency. If rates have gone up, the penalty might be worth paying because you can reinvest the proceeds in a higher-yielding CD or other investment. If you need cash urgently, the penalty is the cost of accessing your money before the maturity date.
Selling early rarely makes sense if rates have fallen or stayed the same, because you will pay a penalty to get money you could have accessed for free at maturity. Before you sell, compare the penalty cost against what you would gain by moving the money elsewhere. If the gain does not outweigh the penalty, it is usually better to hold the CD until it matures.
What happens to your CD if you do not sell it
If you keep your Fidelity CD until maturity, you will not pay any penalty. At maturity, Fidelity will either automatically renew the CD at the current rate, or move the proceeds to your cash balance — the default depends on the specific CD and your account settings. You can change this setting before maturity so the CD does what you want when it matures.
If you want to know your CD's maturity date and current renewal settings, log into your account and find the CD in your holdings. Fidelity displays the maturity date and shows you what will happen automatically when that date arrives. You can change the renewal setting anytime before maturity.
Transferring CDs from another bank to Fidelity
You cannot transfer a CD from another bank into a Fidelity account. CDs are not transferable between institutions — they are issued by a specific bank and can only be redeemed by that bank. If you own a CD from another bank and want to move your money to Fidelity, you must wait until the CD matures, then deposit the proceeds into a Fidelity account. Alternatively, you can contact the original bank and ask about early redemption, though you will pay their early withdrawal penalty.
If you want to consolidate multiple CDs at Fidelity, you can only do so with CDs you have already purchased through Fidelity. For CDs held elsewhere, you will need to manage them separately or let them mature and then move the money to Fidelity.
Frequently Asked Questions
What is the typical early withdrawal penalty on a Fidelity CD?
Penalties vary by CD term. Fidelity shows the exact penalty before you sell, calculated as a number of months of interest based on the CD's original term. A shorter-term CD (like one year) usually has a smaller penalty than a longer-term CD (like five years).
Can I sell part of a CD or do I have to sell the whole thing?
You must sell the entire CD. Fidelity does not allow partial redemptions or sales of CDs. If you only need part of the money, you will have to sell the whole CD and reinvest the portion you do not need elsewhere.
How long does it take to get the money after I sell a CD?
The proceeds settle into your cash balance within one to two business days. You can then use the cash to buy other investments or request a withdrawal to your bank account.
What if my CD is in an IRA or retirement account?
The same early withdrawal penalty applies, but you also need to be aware of IRA withdrawal rules. If you are under 59½, you may owe income tax and an additional 10% penalty on the withdrawal, depending on the account type. Consult a tax professional before selling a CD in a retirement account.
Can I sell a CD that is still in its initial term?
Yes, you can sell a CD at any time before maturity, even if it is only days old. You will pay the early withdrawal penalty regardless of how long you have held it.