A certificate of deposit, or CD, is a popular savings option that may allow you to earn a higher interest rate compared to regular savings accounts, providing a safe and predictable way to grow your money over time. Most CD accounts offer a fixed interest rate in exchange for depositing your money for a specific period, known as the term.³ If funds are withdrawn prior to the end of the term, a penalty is incurred, which can be a specific dollar amount or a percentage of either the original principal or the amount withdrawn.

Here are some key points to know: 

• U.S. Bank CD rates vary based on type of CD, location, term length and amount deposited.
• The annual percentage yield (APY) reflects the total amount of interest you'll earn in a year, including compounding. In contrast, the interest rate is the nominal rate without compounding.²
• The rate for your CD is guaranteed when funds are held for the full length of the term you choose.
• Once your CD reaches the end of its term, you may withdraw your funds without penalty during the grace period. Otherwise, your CD will automatically renew for the same duration.
• The rate at which your CD renews is based on the published rate for the CD, excluding CD Specials, that is closest to but not exceeding the term of the CD.³
• Rates are subject to change at the bank's discretion and may vary daily.

Yes. Funds held in a U.S. Bank certificate of deposit are protected by FDIC insurance, which covers up to $250,000 per depositor for each ownership category.¹ This insurance provides added security, knowing that your money is safeguarded with us even in unlikely adverse scenarios. While CDs at U.S. Bank are FDIC-insured, not all CDs at every institution are. It's always important to review the terms and conditions of a CD to determine whether or not it is FDIC-insured.

A bank CD is a reliable and secure way to grow your savings. It offers a fixed interest rate and is FDIC-insured,¹ meaning your money is protected up to applicable limits. It’s a great option if you have a specific goal and don’t need immediate access to your funds. Compared to other savings options, CDs typically offer higher interest rates, allowing you to earn more on your money over time.

Consider your financial goals and how long you can comfortably lock in your funds. Shorter terms offer quicker access to your money, while CD rates are typically higher for longer terms. For short-term goals, a 6-month to 1-year CD might work best. For longer-term savings, a 3-year or longer CD could help you maximize interest. 

When your CD reaches its maturity date, you have several options to consider. We will notify you in advance, offering you time to decide your next course of action. Upon maturity, you can withdraw your funds, including the earned interest, without penalty, or you can choose to reinvest in a new CD. Many CDs have an automatic renewal feature, where the funds are reinvested into a new CD of the same term. You can also withdraw some or all of the funds or adjust the terms of renewal. Any changes to CDs can be made at maturity until the grace period ends (the grace period can be found in your maturity notification or on the Overview tab of your CD). This ensures you retain control over your funds based on your evolving financial needs.

The minimum deposit requirement for opening a CD may vary depending on the bank and type of account. At U.S. Bank, our Standard CD requires a minimum opening deposit of just $500⁴ up to a maximum of $250,000 with terms ranging from one month to 60 months. Our CD Special requires a minimum opening deposit of $1,000 and offers fewer term lengths.

There is a penalty for early withdrawal on a CD from U.S. Bank. The penalty is usually based on the account balance, APY² and interest rate.

A CD offers a higher, fixed interest rate in exchange for committing your money for a defined term, while a traditional savings account keeps your funds fully liquid at a variable rate. For savers who don't need immediate access to their money, a CD is often the more rewarding choice.

Key differences at a glance:

• Rate structure: CDs lock in a fixed APY. Savings accounts fluctuate with market conditions
• Liquidity: Savings accounts allow withdrawals anytime. CDs impose early withdrawal penalties
• Term commitment: CDs range from 30 days to five or more years. Savings accounts have no set term
• Purpose: CDs suit goal-based saving with a clear timeline. Savings accounts serve everyday financial flexibility