How to Open a CD Account

Until now, your savings needs might have been taken care of by a standard savings account. But there may be ways to earn more interest on your money. One way is opening a CD account. You may have seen this personal finance tool advertised by a bank as a certificate of deposit.

This article will explore what a CD account is and why they're different from other deposit accounts. We'll also look at the different kinds of CD accounts, and how you can open one.

What is a CD?

A certificate of deposit is a relatively low-risk investment, typically offering higher interest rates than the usual savings account. For a new CD, you'll make an opening deposit with a specific amount of money. That initial deposit must at least match the minimum opening deposit—but you can deposit more if you wish.

Additionally, you agree not to withdraw any of the money for a set period (the "term"). Usually, the term will be from three to twelve months, but it could be longer. In return for leaving money in the bank for that long, the bank pays a fixed rate of interest.

One benefit of CDs is knowing exactly how much interest you’ll earn. Market fluctuations and interest-rate swings have no effect on a CD's fixed interest rate. At TD Bank, certificates of deposit are FDIC-insured. That means the Federal Deposit Insurance Corp. insures up to $250,000 per depositor, per insured bank, for each account ownership category.

A drawback to CDs is having to commit to a certain amount of time before the money can be accessed. An early withdrawal often incurs penalties. Typically, though, early withdrawal penalties tend to be limited to a loss of interest, not a loss of initial investment. However, if a CD account falls below a required minimum balance, other fees or penalties may be charged.

How to Open a CD

Let's go over the basic steps in opening a CD account and see what's typically needed. It's a similar process to opening any checking or savings account. But there are a few additional things to consider in advance.

  1. Decide on what kind of CD to open
    There are a variety of CDs, so you'll need to think about which type fits your needs. Some CDs can get you started with a lower minimum deposit. Other CDs may offer higher interest rates if you deposit more money. If you open a CD at a bank where you already have an account, you might get a CD rate increase. It's worth exploring all the options and CD rates to see what works best for you

  2. Apply for an account
    The process of opening a CD is much the same as other bank accounts. You'll likely need your personal information: birthdate, address, contact info, driver's license number and so on. You may choose to visit a bank's physical location and apply for a CD account in person. But banks, and not just online banks, often make the process easier by letting you fill out forms and submit your info online. Many times, you can open a CD account within minutes. Some banks will even let you open an account over the phone by speaking with a banking representative

  1. Choose the CD term
    Now it's time to define the CD's term—how many months or years the CD will wait before maturity. Most of the time, you can't touch the money (without penalties) until the CD matures. So only commit to the amount of deposit time that fits your financial situation

  2. Fund the account
    After the account is successfully opened, you'll need to fund it. The funding deposit will have to meet at least the minimum deposit amount. When banking online, you can usually go to your new account and set up a funding draft. That's an easy, safe and secure way to move funds from another account into a CD. You could also choose to make a deposit in person at a physical bank location. Or you could even mail a check to the bank, if you didn't mind the extra wait

CD accounts offered at TD Bank

TD Bank offers CD options that cover almost anyone's needs. If you want to take advantage of the benefits of CD savings accounts, you might consider checking out these options:

  1. TD Choice Promotional CDs1
    With a variety of terms and competitive interest rates, a TD Choice Promotional CD is one option. The CD's tiered interest rates increase along with your balance amount. And when you have an eligible TD checking account, TD offers a "bump rate" to increase your CD's interest rate2. There's a low, $250 minimum deposit needed to open and maintain the account. Choice Promotional CDs offer a wide range of terms, from 3 months to 5 years

  2. TD No-Catch CDs
    The No-Catch CD from TD Bank gives you the security of a CD while adding some flexibility. You can make one, no-penalty withdrawal per term. That's handy if you think you'll need quick access to your funds in the near future. Or perhaps you'd just like to have the option, in case unexpected expenses pop up. Both 6- and 12-month terms are available. Plus, you'll only need to deposit $250 to open and keep the account

  1. TD Step Rate CDs
    With interest rates that are guaranteed to increase every year, a TD Step Rate CD might be an attractive offering for many customers. It includes one optional penalty-free withdrawal on every yearly anniversary of the account opening. Either 3-year or 5-year terms are available with TD's Step Rate CDs. A $250 minimum deposit is required to open and maintain this account

Open an account today

Don't wait to set yourself up with a CD account and take advantage of the safe, secure options TD Bank provides. You can start earning interest today, and lock in the current rates.

You can easily apply online at TD Bank and open an account in minutes. If you'd like to talk to a TD banking specialist, they're available to assist you at 1-888-751-9000, or visit the TD Store Locator to find a TD Bank near you. 

Your TD account comes with more than just a great rate

  • Mobile Banking

    Bank anytime, anywhere—right from your phone with the TD Bank app.

  • TD Overdraft Relief3

    Overdrafts happen. When they do, TD Overdraft Relief gives you flexibility and options to avoid fees.

  • TD Checking Accounts

    Find an account that meets your needs – and has the perks you want.

  • TD Savings Accounts

    Whether you're saving for a rainy day or with a goal in mind, start today.

This article is based on information available in March 2023. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available. For specific advice about your unique circumstances, consider talking with a qualified professional.

1TD Choice Promotional CDs will automatically renew at maturity to the same term at the non–promotional TD Choice CD interest rate and APY in effect at the time of renewal unless we notify you otherwise.

2To qualify for the relationship bump rate, customers must own an eligible TD Bank personal checking account in good standing at the time of CD account opening or renewal. See the Personal Deposit Account Agreement for more details about eligibility.

3Overdraft Services do not apply to TD Essential Banking Accounts. We may decline or return transactions that would result in an overdraft. Transactions that you make may cause your Account to overdraw but we will not assess your TD Essential Banking Account an overdraft fee or return item fee. For example, preauthorized transactions and other transactions may post to your Account even when the available balance in your Account is not sufficient to pay the transaction.

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