What Is A Certificate Of Deposit Account?
A certificate of deposit account is a savings product offered by most banks and credit unions in the US. They are different from savings accounts in that they mature over a specific term and typically come with a fixed rate of interest.
CD term lengths usually range from one month to five years, during which they earn a fixed rate of interest. They typically have a higher APY than savings accounts and money market accounts. Withdrawing from a CD account before maturity can attract penalties, subject to the conditions of the financial institution where it’s held. Depending on the prevailing interest rates, CDs are often the best way to take advantage of the highest interest rates on your savings at low risk.
Types of CDs
CDs are immensely popular because they protect your savings from the volatility of the stock market and the general economy. However, before you put your money into one, consider that there are several types of CDs that come with their own set of unique features and benefits. Let’s take a look at the most common types of CDs:
Traditional CDs: Also known simply as CDs or fixed-rate CDs, these are the most basic format in the category. They are essentially time deposits with fixed interest rates and limited liquidity, which means that your deposit is locked in for the period of the deposit.
Bump-up CDs: This type of CD lets you jump to a higher interest rate during the deposit period. Let’s say you opened a 12-month CD account at 2% APY. Six months down the line, you notice that your bank is now offering 2.5% APY on CDs. A bump-up CD lets you request your bank to raise your APY to the new rate at no extra charge or commitment.
Step-up CDs: This is pretty much the same as a bump-up CD. The sole difference is that instead of having to manually request your bank for a bump-up to a better interest rate, it happens automatically when you’ve put your money in a step-up CD.
High-yield CDs: Similar to a high-yield savings account, a high-yield CD offers a substantially higher rate of interest than regular CDs. The catch is that you may be required to make a bigger initial investment or commit to a longer lock-in period in a high-yield CD account.
No-penalty CDs: As the name suggests, these CDs do not require you to pay a penalty if you make a withdrawal before maturity as most other types of CDs do. This is a great option for people who are interested in using a CD as an emergency fund.
Add-on CDs: This is another unique CD that lets you make additional deposits to your account during its term. The minimum add-on amount differs from bank to bank, as does the minimum deposit amount for this type of CD. It offers a great opportunity for people who want to use CDs as a recurring savings instrument.
Beyond the six most common types listed here, there are multiple other CD formats with varying features and benefits. For instance, market-linked CDs, foreign currency CDs, jumbo CDs, IRA CDs, brokered CDs, zero-coupon CDs, and so on. Do your research to find out which one suits your requirements the best before investing.
CDs vs. Other Savings and Deposit Options
The biggest draw of CDs is that they offer predictable returns at low risk. You know exactly what you’ll earn when your CD matures right at the time of opening your account. That makes them ideal for people who are saving up for retirement or a specific financial goal and cannot afford to risk their principal investment.
On the flip side, interest earned on a CD can seem meager in comparison to certain other savings and investment options that offer tantalizingly high returns. However, these high yields are predicated on you accepting a significantly higher level of risk. What that often means is that not only may you not earn any interest on your investment, you could potentially lose a part or most of your principal.
The bottom line here is that as long as you’re willing to err on the side of caution, CDs are a reliable option to keep your money safe and growing over time.
CD Interest Rates
Like any other banking instrument, interest rates on CDs are closely tied to Federal Reserve benchmarks, and generally follow the cues set by the US central banking system. Banks and credit unions often raise or lower interest rates predictively in anticipation of Federal Reserve announcements depending on their demand for consumer deposits.
According to the FDIC, average interest rates on CDs ranged from 0.15% (for one-month CDs) to 1.21% (for five-year CDs), as of January 2023. Meanwhile, the average interest rate on a one-year CD stood at 1.28% during the same time.
Being able to secure the best APY on CDs, however, goes beyond the prevailing interest rates. Much of it depends on a variety of choices and factors. For instance, you can secure a higher rate of interest on your deposit if you’re willing to have your money invested for a longer term. Similarly, a CD with a high minimum deposit requirement is likely to return a better rate of interest than one with a low entry amount.
Explore the Best CD Options With Raisin
Finding the best CD can be daunting when you consider the sheer number of options available out there. That’s why Raisin makes it easy for you to locate and invest in a CD that meets your specific savings requirements, often at rates multiple times the national average.
We are an online marketplace that lists only federally insured savings and deposit instruments from reputable banks and credit unions across the US. Raisin lets you operate multiple accounts with different financial institutions, all with the comfort of a single log-in.
Sign up on Raisin today to see your savings grow faster and safer!
What Is Raisin?
Raisin brings together high-yielding savings products offered by a network of U.S. financial institutions. It’s your destination to discover competitive savings products and start saving wisely. Select and fund multiple savings products from different institutions and manage them all from one account.
Safety
Funds deposited into any of the savings products available through Raisin are always held by a federally insured financial institution. A very easy and safe way to diversify your deposit portfolio. We use a host of cybersecurity measures to protect your funds and sensitive information.
Choice
Savings products from our network of financial institutions offer flexible terms and some of the most competitive interest rates. You can easily find the right product or mix of products for you.
Convenience
One account to hold all your deposit products. Simplified statements. Easy access to manage your funds – all through a streamlined digital platform.
How Raisin Protects Your Money and Personal Information
Federal Deposit Insurance Corporation
All participating banks are members of the FDIC. Deposits in participating banks are insured by the FDIC up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured bank, for each deposit account ownership category.
Click to learn more about FDIC insuranceNational Credit Union Administration
All participating credit unions are insured by the NCUA through its Share Insurance Fund. Deposits in participating credit unions are insured by the NCUA up to the limits of federal law. The standard insurance amount is $250,000 per depositor, per insured credit union, for each deposit account ownership category.
Click to learn more about NCUA insuranceCybersecurity is a top priority at Raisin
We invest in a variety of technologies to protect our customer’s data, privacy and transactions. These include multi-factor authentication, encryption, and web application firewall advanced internet protection technologies. We are a SOC 2 certified organization, which means we have met the requirements outlined by the American Institute of Certified Public Accountants (AICPA) to ensure that we have the controls in place to keep customers' data secure and private.
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FAQs
Raisin is a digital platform that gives savers unparalleled access to a variety of deposit products through the convenience of a single account, helping you unlock the growth potential of your cash savings.
Raisin customers use the platform to fund federally insured deposit products offered by numerous U.S. banks and credit unions with a wide range of maturities and APYs (annual percentage yield), allowing you to build a savings strategy to suit your earning and liquidity needs.
Raisin is not a bank. It provides the digital “storefront” where banks and credit unions can promote their deposit products.
Raisin is operated by Raisin LLC, a 100% subsidiary of Raisin GmbH, a trailblazer for open banking in the deposits and investments space. In the U.S., Raisin helps banks and credit unions improve their deposit funding by offering national reach for their retail deposit products, and provides savers with better access, more choice and higher convenience when evaluating savings products from FDIC insured banks and NCUA insured credit unions.
Your Raisin account gives you access to savings accounts and certificates of deposit offered by a variety of banks and credit unions with the security of federal deposit insurance. These products include:
High-yield Savings Account (HYSA). As its name indicates, this account type functions like a traditional savings account — with typically no restrictions on depositing and withdrawing funds — but earns interest (or dividends in the case of credit union savings products) at rates that are higher than the national average for standard savings accounts.
Money Market Deposit Account (MMDA). Also known as a money market account or MMA, this type of savings account offers a varying rate that allows you to earn interest (or dividends) on your funds with maximum flexibility for withdrawals. Like a HYSA, an MMDA offers features of a traditional savings account with typically higher returns.
No Penalty CD. Through the flexibility of a No Penalty CD, you can lock in a competitive rate for a fixed term with the option to make a full withdrawal without having to pay a penalty for the early termination. Terms and conditions may vary by product. Please see specific product terms for more details.
Fixed Term CD. With this longstanding savings vehicle, funds are held for a fixed term, and a competitive APY (annual percentage yield) provides safe, predictable earnings. In contrast to No Penalty CDs, typically you are charged a fee if you do not complete the full term of the Fixed Term CD.
Interest (or dividend in the case of credit union savings products) is compounded daily and posted to your account monthly.
The short answer is yes! Raisin exclusively partners with FDIC-insured banks and NCUA-insured credit unions.
For Raisin customers who hold savings products offered by one of our partner banks, funds are insured by the FDIC up to the maximum amount in accordance with and as permitted by law at each bank holding their funds. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per account ownership category. Ownership categories as defined by the FDIC include single bank accounts (owned by one person/depositor) and joint bank accounts (owned by two or more persons/depositors). Revocable trust accounts and some types of retirement accounts (e.g., IRAs) are among the other ownership categories covered by FDIC insurance. All deposits you have at a bank — whether made through Raisin or otherwise — count toward the deposit insurance limit. If funds held at a bank in a certain ownership category exceed the coverage limit, then the amount in excess of the limit will not be insured.
For Raisin customers who hold a savings product offered by one of our partner credit unions, funds are insured by the NCUA through its Share Insurance Fund. According to the NCUA, each credit union member has at least $250,000 in total coverage. The Share Insurance Fund insures individual accounts up to $250,000. Additionally, a member’s interest in all joint accounts combined is insured up to $250,000.
At Raisin, cybersecurity is our priority. Raisin is a SOC 2 certified platform, meaning it has been validated by outside auditors across five (5) key information security principles. We also use a variety of measures to protect our customers' data, privacy and transactions, including:
• User authentication. The Raisin platform uses multi-factor authentication combined with leading authentication technology to validate our customers’ identities.
• Data encryption. Your personal information is encrypted in-transit and at rest using advanced cryptographic security algorithms.
• Site protection. Web application firewall advanced internet protection technologies are implemented to protect Raisin.com from malicious actors, botnets and denial of service attacks (DDOS).
• Monitoring. An always-on information security monitoring platform detects and alerts us to information security events.
• Assessments. Our platform undergoes vigorous security assessments and testing throughout the lifecycle of application development, from architecture planning to production phases.
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A. Check out our savings marketplace and choose a product in which you would like to deposit money.
B. Create your username and password.
C. Complete an application and, after successful identity verification, link a bank account from which to fund your first savings product.
D. Start earning interest as soon as your money is received by the bank or credit union offering the savings product you selected.
Any questions or concerns? Email us at support.us@raisin.com.
All deposits and withdrawals are completed within one to three (1-3) business days. After the initial deposit a withdrawals limitation for the first few business days may exist.
Business days are Monday through Friday excluding U.S. bank holidays.
For products offered by banks, all necessary registration is handled when you become a Raisin customer. One of the many benefits of our platform is that you can open a single account and earn competitive interest rates from banks in the Raisin network. When you select and fund a savings product offered by a credit union, there is an additional step of becoming a member. Raisin makes that process quick, easy and free. You still have one Raisin login and can view all your savings products in one convenient dashboard.
The current APY for your savings products can always be viewed on the Account Overview page when you are logged in to Raisin. This information also appears on monthly statements.
You cannot currently link your Raisin account to a third-party app, but we may offer this feature in the future. For now, you will not be able to link your selected savings product to a third-party app even if the bank or credit union offering that product does so outside of the Raisin platform.
The Raisin name and logo are trademarks of Raisin GmbH. All other trademarks, logos, marks, and brand names are the property of their respective owners — used with permission.
© 2023 Raisin GmbH. All rights reserved.
*APY means Annual Percentage Yield. APY is accurate as of {todayDate}. Interest rate and APY may change after initial deposit. Minimum opening deposit is $1.00.
Customer funds are held in various custodial deposit accounts. Each customer authorizes the Custodian 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 Custodian 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 through Raisin.com. Central Bank of Kansas City, Member FDIC, d.b.a. Central Payments is the Service Bank. Lewis & Clark Bank is the Custodian Bank.