Are CDs safe?
Wondering if your money’s safe in a CD? Find out what insurance coverage applies and what to consider before locking in a rate.
Key takeaways
Certificates of deposit (CDs) are bank deposit products that offer a fixed rate of interest in exchange for keeping your funds locked away for a set period of time
Certificates of deposit are generally thought of as a relatively secure way for savers to invest their cash, especially when offered with federal deposit insurance
The nature of a CD means that the principal is not subject to market volatility as it might be with a stock market investment
How safe are certificates of deposit?
Certificates of deposit, or CDs, are a type of savings account that typically offers a fixed rate, so you’ll know from day one how much interest will accumulate over the agreed period. As long as the CD is held to maturity, neither your rate nor your initial deposit will fluctuate. This may appeal to savers who prefer steady growth over the uncertainties of more volatile options like stocks.
So, are CDs safe when it comes to protecting your money? CDs offered by insured banks are typically covered by FDIC insurance, which protects up to $250,000 per depositor, per bank and ownership category. This can provide reassurance that eligible deposits are protected if the bank fails. If you open a CD through a credit union, it is likely called a share certificate and is generally protected in the same way by NCUA insurance.
Are CDs safe if they are opened online?
As long as the provider is federally insured by either the FDIC or NCUA, online CDs typically offer the same deposit protection as an account offered by a brick-and-mortar bank or credit union. When comparing online accounts, you might look out for FDIC or NCUA membership on the provider’s website.
So, how safe are CDs when it comes to using online banking services? Online platforms often apply security features like encryption and two-factor authentication to help safeguard your personal information. However, it may be worth checking the provider’s safety measures before opening an account.
Are CDs secure compared to other savings options?
Unlike a high-yield savings account, which often comes with a variable interest rate, CDs typically provide a fixed interest rate that stays the same through to maturity. This can make it easier to map your returns to future goals without surprises along the way.
A money market account might give you faster access to your funds, but it will have a variable rate compared to the CD. Given that the interest rate environment can mean short-term decreases are possible, a CD’s locked-in interest rate could offer more certainty for savers looking to avoid fluctuations. Read more about whether money market deposit accounts are safe.
For a clear rate comparison across multiple banks, Raisin allows you to explore and compare CD accounts on one platform, helping you find an account based on your financial plans and timeline.
Bank
Product
APY
Maturity
Raisin is not an FDIC-insured bank or NCUA-insured credit union and does not hold any customer funds. FDIC deposit insurance covers the failure of an insured bank and NCUA deposit insurance coverage covers the failure of an insured credit union.
How safe are CDs if the market crashes?
Because a certificate of deposit isn’t tied to the performance of equities, it generally avoids the price drops that can occur when stock values fall — during a stock market correction, for example. This separation from market-based pricing helps shield CDs from the day-to-day volatility that can impact riskier assets.
Compared to stocks, bonds, or even variable-rate savings accounts, CDs provide a set amount of interest based on how much you deposit. Their fixed interest and principal protection offer savers a predictable path — even when other investments may experience downturns. For other types of accounts, it can help to know what might happen to savings when markets are volatile.
Are CDs a safe investment option?
Some savers might view certificates of deposit as a way to lock in stability. But are CDs safe investments? It’s important to be aware of the risks and weigh them up against the potential benefits.
Advantages of CDs for safety
- Fixed rate: This type of financial product generally comes with a fixed rate that does not change for the duration of the account, so you might find it easier to anticipate your total return before the CD reaches the end of its term.
Principal protection: It’s also possible for your principal to remain protected throughout the term. Depending on the institution, many CDs are insured up to specific legal limits, which could help safeguard your deposit even in rare cases of bank or credit union failure.
- Stability: Unlike market-based investments that may fluctuate daily, CDs maintain a steady value from start to finish.
Key considerations and risks of CDs
- Limited liquidity: Most types of CDs restrict early access — unless you opt for a no-penalty CD. Trying to make an early withdrawal could leave you with a fee that is often equal to a certain number of months’ interest. The exact withdrawal terms depend on the institution and the CD’s term structure. To better understand how these charges work, you can explore the structure of penalties for early CD withdrawals.
Rate risk: Holding a fixed-rate CD means locking in your rate, which could lead to potential rate risk if market interest rates rise. Savers could end up missing out on better earnings elsewhere.
- Inflation risk: There’s also the risk that growing inflation eats into your returns over time, reducing what your interest is worth in real terms. Since different banks apply their own rules, reading the fine print is key before making a long-term commitment.
How to maximize the safety of your CD investments
Some savers opt to spread their CD accounts across different banks or credit unions, especially when their deposits start to approach the $250,000 coverage limit per institution and ownership category.
Before locking in a term, it may be helpful to consider your expected cash needs. Choosing a CD term that aligns with your financial goals and expenses might prevent you from accessing money earlier than planned. Holding funds too long in a single term could potentially limit flexibility during unexpected life events.
One approach that may offer greater flexibility is CD laddering. This investment strategy involves opening several CDs with different maturity dates so that they come due at regular intervals. When one matures, the principal (plus interest) could be reinvested through a rollover into a new CD, possibly at a higher rate. This method spreads out rates and terms, providing access to cash as needed.
Open a CD and start building your savings with Raisin
While certificates of deposit may not offer easy access to funds that some other savings options do, savers can still benefit from fixed, competitive returns for their chosen period.
At Raisin, you can access multiple CD accounts, high-yield savings accounts, and money market deposit accounts from a network of banks and credit unions — all with a single login. It’s easy to compare offers and open CDs with a minimum deposit of just $1.
If you’re ready to explore options, you can view all the CD accounts and choose terms that may best support your goals. Alternatively, view the whole range of savings accounts available through Raisin.
FAQs about the safety of CDs
Are CDs protected if a bank or credit union fails?
If a bank or credit union were to fail, your certificate of deposit may still be protected — as long as the provider is insured and your funds fall within FDIC or NCUA insurance limits. These coverage programs are designed to offer protection on your principal, adding an extra level of security around your deposit when held at federally insured institutions.
Are CDs safer than stocks or bonds?
CDs may offer more stability compared to investments like stocks or bonds. Because they’re not tied to daily market performance, CD returns tend to be more stable if held to maturity. For those with a more cautious attitude to saving, this might provide a more predictable alternative without exposure to major market swings.
Can you lose money with a CD?
Money held in a CD generally won’t lose value if kept until maturity. However, taking an early withdrawal could result in penalties, which might reduce your interest or, in rare situations, impact the original principal. Reviewing the CD’s terms ahead of time may help avoid these costs.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
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*APY means Annual Percentage Yield. APY is accurate as of May 21, 2026. Interest rate and APY may change after initial deposit depending on the terms of the specific product selected. Minimum opening deposit is $1.00.
Raisin is not an FDIC-insured bank, and FDIC deposit insurance only covers the failure of an insured bank.
Raisin is not an NCUA-insured credit union. NCUA deposit insurance only covers the failure of an insured credit union.
Raisin does not hold any customer funds. Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodial Bank to hold the customer’s funds in such accounts, in a custodial capacity, in order to effectuate the customer’s deposits to and withdrawals from the various bank and credit union products that the customer requests through Raisin.com. The Custodial Bank does not establish the terms of the bank or credit union products and provides no advice to customers about bank or credit union products offered by the applicable bank or credit union through Raisin.com. Each customer also authorizes the Service Bank to move funds among the various banks and credit unions at the customer’s request. First International Bank & Trust (FIBT), Member FDIC, is the Service Bank. Bell Bank and Starion Bank, each Member FDIC, are the Custodial Banks.
†Based on $250,000 in FDIC or NCUA insurance coverage per insurable category of ownership at each partner bank or credit union on the Raisin platform (each a "Product Bank"), when aggregated with all other deposits held by you at such Product Bank and in the same insurable category. Deposits made through Raisin will be eligible to receive deposit insurance from the FDIC or the NCUA (each a "Deposit Insurer") in accordance with and up to the maximum amount permitted by law at each Product Bank. Raisin is not a bank or credit union and does not hold any customer funds. Funds are held at FDIC-insured banks and NCUA-insured credit unions. Deposit insurance covers the failure of an insured bank or credit union. Certain conditions must be satisfied for pass through deposit insurance coverage to apply. Customers may choose to deposit funds with identically registered accounts at different Product Banks on the Raisin platform to be eligible for Deposit Insurer coverage up to $10 million for individual accounts and $20 million for joint accounts when at least 40 Product Banks are utilized. Please be aware, however, that any deposits you have at a Product Bank, whether through the Raisin platform or outside the Raisin platform, that you may hold in the same capacity (such as in an individual capacity or joint capacity) count toward the applicable Deposit Insurer's deposit insurance maximum amount, and any such amounts that you hold in the same capacity at a Product Bank that exceed the maximum insurance coverage by the applicable Deposit Insurer will not be insured. For more information on FDIC deposit insurance, please see here. For more information on the NCUA share insurance fund, please see here. You are solely responsible for monitoring the amount of funds you have on deposit at each a Product Bank, whether through the Raisin platform or outside the Raisin platform, to confirm that the deposits you hold in the same capacity at each Product Bank do not exceed the maximum deposit insurance coverage provided by the applicable Deposit Insurer.