What Do I Need To Open a CD?

Everything you need to know before opening a CD

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A certificate of deposit (CD) allows you to invest a certain amount of money for a set amount of time to earn money for fairly low risk. You can’t withdraw your funds from the CD before the term ends without a penalty fee, but at the end of the term, you get a fixed amount of interest, which makes a CD a secure investment.

You can open a CD online through a bank or credit union via a fairly simple process.

Key Takeaways

  • A CD offers a fixed rate of return for a set term.
  • You choose how much you want to invest and how often you receive payments.
  • You can open a CD through a bank or credit union online.

What You’ll Need To Open a CD

Nowadays, you can easily open a CD online in a process similar to opening a CD in person at a financial institution. If you don’t already have an account at the bank or credit union, you’ll first need to open one.


You’ll have to provide personal information about yourself and identification. Instead of filling out a paper application and showing your identification to a teller in person, you’ll provide this information and documentation through online channels.

Information you’ll generally need to provide to open a CD include:

  • Personal and identifying information (if you don’t have a bank account)
  • The type of CD you want
  • Your desired CD term
  • How you want to collect interest payments (monthly or annually)
  • How you want to fund the CD (check, phone transfer, online transfer, etc.)
  • Funding amount

Minimum Deposits for CD Accounts

CDs usually have minimum deposit requirements, which vary by bank. Typically, the interest rate will be higher for larger deposit amounts and lower for smaller deposits. Some banks don’t require a minimum deposit for a CD.

Some example minimum deposits of CDs from different banking institutions are:

  • Wells Fargo: $2,500
  • U.S. Bank: $500
  • Bank of America: $1,000

Where Can You Open a Certificate of Deposit?

You can find CDs at banks and credit unions, and it’s best to shop around to compare interest rates, minimum balance requirements, and the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA) insurance availability before choosing where to open a CD. Because credit unions aren’t for-profit institutions like a bank, you may be able to get higher interest rates through a credit union.


You usually have to be a member of a credit union to open a CD, and you may not qualify for some credit unions.

How To Open a CD

If you’re ready to open a CD, these are the steps to take:

  • Shop around: Research to see which bank or credit union will offer you the best interest rates and terms for a CD. Make sure they are insured by either FDIC (banks) or NCUA (credit unions) so your investment will be protected for up to $250,000.
  • Open an account: If you don’t have an account, you’ll likely need to open one to create the CD. If you do this online, you’ll fill out an online application and then provide identifying personal information. You will also choose an online account username and password.
  • Choose CD type, term, and amount: Choose what type of CD you want and for how long you want it. Decide how much you want to invest.
  • Pick a payment schedule: Usually, you can choose to receive interest payments on a monthly or annual basis. You can also choose to not collect the interest payment and to invest the payments back into the CD to earn compounding returns.

Frequently Asked Questions (FAQs)

How do you choose a certificate of deposit?

You can choose a CD with a term, minimum deposit amount, and interest rate that work best for you. You can also evaluate different fees such as early withdrawal penalties. Ensure the financial institution offering the CD has FDIC or NCUA backing.

What is the interest rate on a CD?

Interest rates on CDs change with market conditions. Consider shopping around to get the best CD rate and for the terms you prefer.

Why is a CD considered such a safe investment?

When you invest in a CD you get a fixed amount of interest for the time period. The interest rate won’t change, so you can plan for reliable income. Most CDs also are backed by the FDIC or NCUA, which means your investment is safe up to $250,000 even if the bank or credit union fails.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1.  Wells Fargo. “Open a Certificate of Deposit (CD) Account Online.”

  2. U.S. Bank. “Certificate of Deposit (CDs).”

  3. Bank of America. “CD Accounts - Certificate of Deposit (CD) Interest Rates.”

  4. FDIC. “FDIC: Your Insured Deposits.”

  5. National Credit Union Administration. “How Your Accounts Are Federally Insured Brochure.”

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