You can open a CD online through a bank or credit union via a fairly simple process.
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. 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 wantYour desired CD termHow 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: $2,500U.S. Bank: $500Bank 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.
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.
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