Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (2024)

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The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Unlike regular savings accounts, certificates of deposit typically have one deposit: the first time you add money to a CD. Most CDs have minimum opening requirements, but that doesn’t help determine the right amount for you to add to a CD. The amount for a CD depends on your money goals and situation, so let’s narrow down how to determine the right sum.

CDs are for some savings left untouched

A certificate of deposit is a type of savings account. It can be likened to a locked box: You put an upfront sum in, let the money grow uninterrupted for a set period of months or years, known as a term, and then withdraw with interest. The rate of return is nearly always guaranteed upon opening a CD. But not all savings are ideal for CDs.

» COMPARE: Best CD rates

CDs aren’t best for an emergency fund. A standard guideline is to have three to six months’ living expenses in a regular savings account in case of an emergency such as losing a job. Since an emergency fund should be easily and quickly available, a savings account is generally better for that money than CDs. Also, if you withdraw from a CD early, there’s usually a penalty equal to months or years of interest.

CDs aren’t for long-term savings either. When saving for retirement, a general rule is to invest 10% to 15% of your income each year or build up to that amount. Investing vehicles can include an individual retirement account or an employer-sponsored account such as a 401(k). And the money is often invested in some combination of stocks and bonds, which can have higher average returns than CDs.

CDs are good for medium-term savings goals. The best CD rates tend to be at online-focused institutions. High-yield CDs in recent years have reached 4% to 5% annual percentage yields, which might be enough to keep better pace with inflation than regular savings accounts can. CDs also work for savings goals that aren’t immediate, such as a few months to five years out.

» Learn more about when CDs are worth it

Know a CD’s minimum

CDs have a typical minimum balance or opening requirement that’s often around $1,000, but it can range from $0 to $10,000. There are jumbo CDs with minimums traditionally around $100,000, though these CDs don’t necessarily have the best rates in the industry. The minimum is more like a barrier to entry, one to heed but not to stick to as the recommended amount. You generally can’t add money to a CD after the initial deposit, so you’ll probably want to aim for an amount you don’t mind losing access to for some time and that'll earn a decent return. For a rough idea, use a CD calculator to plug in a deposit, CD term and rate. For example, $10,000 placed into a one-year CD at a 5% APY would earn $500 in interest.

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (1)

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Member FDIC

Marcus by Goldman Sachs High-Yield CD

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (2)

APY

5.10%

Term

6 months

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (5)

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Synchrony Bank CD

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (6)

APY

4.90%

Term

9 months

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (7)

Learn More

Member FDIC

Marcus by Goldman Sachs High-Yield CD

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (8)

APY

5.00%

Term

1 year

EXPLORE MORE ACCOUNTS

Know a CD’s federally insured maximum

As with other bank accounts, a CD is federally insured for up to $250,000 at financial institutions that are members of one of two deposit insurance agencies: The Federal Deposit Insurance Corp. is the insurer for banks, and the National Credit Union Administration is the insurer for credit unions, which are the not-for-profit equivalent of banks.

Federal deposit insurance protects your money up to $250,000 if a bank collapses. A bank may allow you to deposit more than that limit if you’re fortunate to have that much. But if the 2023 bank failures, such as that of Silicon Valley Bank, have you worried about losing your money, it’s best to stay within the limit — or see below for strategies to cover funds beyond that. The $250,000 cap includes all accounts you have at the same bank, such as CDs, checking and savings accounts.

5 tips for keeping your money in CDs insured

Here are five strategies:

  • Stay at or under $250,000. Ensure your CD deposit and the expected interest will total less than the $250,000 limit.

  • Open CDs at different banks or credit unions. This approach might take more work, but you can utilize CDs at different rates and terms. A CD ladder is a common way to spread your funds across multiple CDs of different lengths, such as one-year, two-year and three-year terms. Each time a CD ends, you decide whether to reinvest in another CD or put the funds elsewhere.

  • Open CDs in different ownership categories. For example, you could have one CD in your name, another in a joint account with someone else, and yet another as a trust with beneficiaries.

  • Opt for a brokered CD. This is a CD offered by a brokerage or investment firm. This type of CD can be more involved since you’ll need to open a brokerage account and know some basic investing vocabulary. A brokerage account can hold CDs from multiple banks, which allows for FDIC insurance above $250,000.

  • Get more FDIC insurance at a bank using a deposit service called CDARS. More than 3,000 financial institutions, including national and community banks and brokerages, provide their customers with FDIC insurance above federal limits through the financial firm IntraFi’s network. InfraFi’s CDARS service lets you have multiple millions of dollars in CDs at one institution, and those funds are managed behind the scenes at multiple banks to federally insure the full amount. CDARS stands for Certificate of Deposit Account Registry Service.

» Want more tips? Here’s our guide to insuring over $250,000

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Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (9)

Big picture: CDs fit in the cash portion of a portfolio

Here’s a broader way to think of CDs: A portfolio is your overall collection of assets, generally including stocks, bonds and cash. CDs reside as cash investments in the cash part of your portfolio, intended to be safe and used for goals within several years. Long-term investors may decide to have a small percentage — such as 5% — of an overall portfolio in cash investments, which can include CDs and Treasury bills and notes.

The mix of stocks, bonds and cash in your portfolio can depend on factors such as how long you plan to invest and your risk tolerance. Generally, though, you’ll hold more in cash, cash investments and bonds closer to and during retirement.

See CD rates by term and type

Compare the best rates for various CD terms and types:

  • Best CD rates overall.

  • Best 3-month CD rates.

  • Best 6-month CD rates.

  • Best 1-year CD rates.

  • Best 3-year CD rates.

  • Best 5-year CD rates.

  • Best no-penalty CD rates.

  • Best IRA CD rates.

How do CDs work?

Learn more about choosing CDs, understanding CD rates, and opening and closing CDs.

For choosing CDs:

  • CD calculator.

  • Are CDs worth it?

  • CDs vs. regular savings accounts.

  • CDs vs. money market accounts.

For understanding CD rates

  • Current CD rates.

  • Historical CD rates.

  • CD rates forecast.

  • What 2024 Fed rate increases mean for CDs.

For opening CDs

  • Opening a CD account in 5 steps.

  • What is a CD ladder?

  • How to invest in CDs: 3 strategies.

  • How much to put in CDs.

For closing CDs

  • When your CD matures: What to know.

  • CD early withdrawal penalty: What to know.

  • CD early withdrawal penalty calculator.

See CD rates by bank

Here’s a quick list of CD rates at traditional and online banks and a brokerage:

  • Ally Bank CD rates.

  • Bank of America® CD rates.

  • Capital One CD rates.

  • Chase CD rates.

  • Citibank CD rates.

  • Discover® Bank CD rates.

  • Fidelity CD rates.

  • Marcus CD rates.

  • Synchrony Bank CD rates.

  • Wells Fargo CD rates.

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet (2024)

FAQs

Typical CD Minimum Balance or More: How Much Money Should You Put Into CDs? - NerdWallet? ›

CDs have a typical minimum balance or opening requirement that's often around $1,000, but it can range from $0 to $10,000. There are jumbo CDs with minimums traditionally around $100,000, though these CDs don't necessarily have the best rates in the industry.

What is the typical minimum balance for a CD account? ›

A minimum balance requirement is a set amount needed to maintain an account. At financial institutions, the typical minimum CD deposit is $1,000. However, the range of minimum balance requirements can vary widely between financial institutions.

What is a good amount to put into a CD? ›

While that amount will be different for everyone, you should keep a few things in mind. First, a minimum amount is usually required. Most CDs have a minimum deposit between $500 and $2,500, though some can be lower or higher than this range.

How much money do you need to put on a CD? ›

Minimum deposits vary based on account and financial institution, but a required deposit of around $500 to $1,000 is typical when opening a CD. However, it is possible to find CDs with no minimum deposit requirement. Jumbo CDs are like regular CDs but require much larger minimum deposits.

Why do CDs have a minimum balance? ›

Interest Rates: Financial institutions might use minimum balances to entice you with better interest rates and make you want to deposit more. The higher the balance, the juicier the rate. For example, Jumbo CDs set the entrance bar as high as $100.000 while rewarding you with APYs far above 5%.

What is the minimum balance for a CD at US Bank? ›

Term lengths for U.S. Bank's CDs range from one month to five years. Each term's annual percent yield (APY) is the same, regardless of balance. The minimum balance required is $500 and the maximum balance is $250,000.

What is the minimum balance for a CD account at Chase bank? ›

Chase CD Rates vs. Other Top Banks

Compared to other top banks, Chase falls in the middle of the pack for its APYs and $1,000 minimum deposit requirement. While other financial institutions have higher minimum deposits, many don't have a minimum at all.

How much should you put down on a CD? ›

You can expect a minimum CD opening deposit of at least $500 at most banks, though that could rise to $2,500 or more for certain accounts. For example, CIT's Jumbo CDs require a minimum balance of $100,000. CDs with higher minimums often pay higher APYs.

What is a good CD rate to invest in? ›

Compare the Best CD Rates
InstitutionRate (APY)Early Withdrawal Penalty
DR Bank5.50%6 months of interest
Vibrant Credit Union5.50%All earned interest
NASA Federal Credit Union5.50%All earned interest up to 6 months
MutualOne Bank5.40%3 months of interest
15 more rows

Can I open a CD with $100? ›

The interest rate is determined ahead of time and your deposit may be insured up to $250,000, similar to a regular checking or savings account. Minimum amounts to open an account vary based on the CD duration, and are as low as $100. Interest rates for CD accounts are higher than money market and checking accounts.

Do you pay taxes on CDs? ›

Key takeaways. Interest earned on CDs is considered taxable income by the IRS, regardless of whether the money is received in cash or reinvested. Interest earned on CDs with terms longer than one year must be reported and taxed every year, even if the CD cannot be cashed in until maturity.

Should I put extra money in a CD? ›

You generally can't add money to a CD after the initial deposit, so you'll probably want to aim for an amount you don't mind losing access to for some time and that'll earn a decent return.

Is it better to have multiple small CDs or one large CD? ›

Is It Better to Have Multiple CDs or One Large CD? The answer to how many CDs to have depends on the annual percentage yield (APY) you're able to get and the amount you're investing. But APYs and minimum opening deposits vary from one CD to the next.

Are CDs safe if banks collapse? ›

The FDIC Covers CDs in the Event of Bank Failure

But the recent regional banking turmoil may have you concerned about your investment in case of a bank failure. CDs are treated by the FDIC like other bank accounts and will be insured up to $250,000 if the bank is a member of the agency.

Do CDs have hidden fees? ›

CDs are safe, low-risk accounts offering competitive interest rates that remain fixed for the CD's term. Many banks and credit unions charge fees for opening and maintaining CD accounts, which can cut into your earnings. These include early withdrawal fees, monthly maintenance fees and broker fees.

Can you loose money on CDs? ›

The risk of having a CD is very low. Unlike how the stock market or a Roth IRA can lose money, you typically cannot lose money in a CD. There is actually no risk the account owner incurs unless you withdraw money before the account reaches maturity.

What is the minimum dollar amount for a negotiable CD? ›

Negotiable certificates of deposit are CDs with a minimum face value of $100,000. They are guaranteed by banks, cannot be redeemed before their maturation date, and can usually be sold in highly liquid secondary markets. Along with U.S. Treasury bills, they are considered a low-risk, low-interest security.

Is there a fee for a CD account? ›

Certificate of deposit accounts, on the other hand, typically don't charge a monthly maintenance fee. This means you get to keep all the interest you earn. Assuming you don't need to withdraw money from a CD before it matures, CDs can be a fee-friendly way to grow savings.

Is there a minimum amount for Capital One CD? ›

CD Account Requirements

Capital One 360 CDs don't require a minimum opening deposit and don't have a minimum balance requirement. You can't make additional deposits after you fund your account.

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