Certificate of Deposit (CD) FAQ

Certificate of deposit, or CD, is a low-risk savings investment option.

A CD, or certificate of deposit, is low-risk, fee-free savings option.

What is a Certificate of Deposit (CD)?

A CD, or certificate of deposit, is low-risk, fee-free savings option that typically offers a higher return on your money than most standard checking or savings accounts. Generally, the longer the term, the higher the rates.

How long do I have to leave my deposit in the CD?

CDs terms can range from months to decades, but standard duration of a certificate of deposit is 3 months to 5 years.

What happens if I make an early withdrawal?

You’re receiving a higher rate because the financial institution knows they have your deposit for an extended period of time, allowing them to invest, lend and do what banks do. If you choose to remove your cash prior to the agreed upon time, you’ll be penalized…typically 3-6 months’ worth of interest. 

What is the minimum opening balance for a CD?

The minimum amount of deposit varies among institutions as well as type of CD. Certificates of deposit can require a minimum as low as $100. Because the NCUA and FDIC  deposit insurance  is limited to $250,000 per CD, it is suggested that the maximum deposit be limited to that.

Where can I find out what CD rates are available?

Most banks and credit unions post their Certificate of Deposit rates online. Partner Colorado’s current CD rates can be viewed here.

What are the different types of Certificate of Deposits?

Most CDs feature a fixed term, but there are a variety of offerings. The following is a common list of CD types, but you’ll find even more options at Partner Colorado.

  • Variable-rate CD: Typically tied to the prime interest rate, you’ll either benefit from rate increases or earn less depending on the market.

  • Jumbo CD: Requires a very high minimum balance as a tradeoff for higher rates.
  • IRA CD: All the features of a regular certificate but with specific tax advantages for retirement-minded people.
  • Bump-Up CD: This kind of CD lets you trade your original interest rate for a higher one, if available, during your investment period. Usually it’s a one-time option.


What happens when my CD’s term is up?

You will receive written notice at least three weeks prior to the CD’s maturity date. You have a week after the maturity date to withdraw the funds or renew the Certificate of Deposit. If you do nothing, the CD will automatically renew at the new going rate for the same term as the original.

How do I obtain a CD?

CDs are easy to open. Whether you fill out an online application and transfer money electronically or visit a local branch, you’ll find the process simple and fast.