Reliable returns, FDIC guaranteed amounts, safer investment. Certificates of Deposit (CDs) may be the right choice for managing your cash, especially during turbulent markets.

How CDs Work

CDs are federally insured deposits issued by banking institutions. CDs allow you to choose a set timeframe and lock in an interest rate, which is usually fixed for the term of the CD.

  • A Low-Risk Investment
    The FDIC insures these deposits up to $250,000 for non-retirement and retirement accounts.1 If the issuing bank were to fail, your money, including accrued interest, will be returned up to the insured amount. For more information about FDIC coverage, visit Link to External Web Site
  • Competitive Interest Rates
    CD rates are often better than a traditional savings account because you are willing to give up access to the money for a period of time. Other factors include:
    • Maturity date - typically the longer the term the higher the interest rate
    • Prevailing interest rates - banks compete to offer better rates to attract customers
    Once you purchase, the interest rate remains the same throughout the CD's term. This can be to your benefit if interest rates fall during the CD's set time period. On the flip side if interest rates rise, you would be locked in to the lower rate of return.
  • Options at Maturity
    At a CD's maturity, you can close the account or roll the money to a new CD. Whether you buy a new CD or take the money out, the interest earned in a non-retirement account is taxable. Keep in mind that early withdrawals may result in penalties or a principal loss.

Brokerage CDs Versus Bank CDs

Banks and brokerages offer CDs, but brokerages offer the benefit of a variety of choices at competitive rates and enhanced FDIC insurance.

  Brokerage CDs Bank CDs
Choice Access CDs from many different banks Banks only sell their own CDs
Convenience Helps you find the most competitive yields

All of your CDs on one statement
Access to CDs where you bank
Confidence CDs you buy from each issuer are, in total, fully insured to the FDIC maximum, regardless of how many CDs you purchase.

Example: 10 non-retirement CDs from 10 banks through one brokerage service = $2,500,000 FDIC coverage
Each CD you buy from a different issuer is fully insured to the FDIC maximum, regardless of how many CDs you purchase.

You get the $250,000 FDIC maximum per bank, regardless of the number of CDs you hold with them.

Example: 10 non-retirement CDs at one bank = $250,000 FDIC coverage
Flexibility Brokerage CDs may be traded before maturity at the prevailing market price on the secondary market. The value will fluctuate based on size, time remaining before maturity and the level of interest rates. Withdrawing money before maturity will subject you to penalties and loss of some interest.

If your CD has a call provision, please be aware the decision to call the CD is at the issuer's sole discretion. Also, if the issuer calls the CD, you may be confronted with a less favorable interest rate at which to reinvest your funds.

Money Market Fund: An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in the fund.

Certificates of deposit (CDs) are offered through American Century Brokerage are issued by Federal Deposit Insurance Corporation (FDIC)-insured institutions, and are subject to change and availability. There is a $55 early termination fee and possible market value adjustments. Brokered CDs will fluctuate in market value between purchase date and maturity date due to their ability to be sold on the secondary market. Because the secondary market for CDs is generally illiquid, a significant loss of principal could result if your CD is sold prior to maturity. American Century Brokerage makes no judgment as to the creditworthiness of the issuing institution and does not endorse or recommend the CDs in any way.

Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member , .