Yes, Charles Schwab offers CDs through its brokerage platform

Charles Schwab sells certificates of deposit from multiple banks and credit unions, rather than issuing its own CDs. When you open a CD through Schwab, you are actually depositing money with the underlying bank or credit union—Schwab acts as the broker connecting you to the issuer. This matters because your deposit is insured by the FDIC or NCUA up to the standard limits, which are typically $250,000 per depositor per institution.

Schwab's CD marketplace lets you compare rates and terms across different issuers without opening separate accounts at each bank. You can buy, hold, and manage all your CDs in one place alongside your other Schwab investments and accounts. When your CD matures, the money returns to your Schwab account, where you can reinvest it, move it elsewhere, or withdraw it.

Key Takeaways

  • Charles Schwab offers CDs from multiple banks and credit unions through its brokerage platform, not CDs issued by Schwab itself.
  • You can compare CD rates and terms from different issuers without opening separate bank accounts.
  • Your deposits are FDIC or NCUA insured up to standard limits, with the insurance tied to the issuing bank or credit union, not to Schwab.
  • Schwab charges no commission or markup when you buy or sell a CD through its platform.
  • Early withdrawal from a Schwab CD typically means selling it on the secondary market rather than breaking it with the issuing bank.

How to find and buy a CD through Schwab

Log into your Schwab account and navigate to the Fixed Income section, where you will find the CD search tool. You can filter by maturity length (three months to five years or longer), current yield, and issuer type. Schwab displays the annual percentage yield (APY) for each CD so you can compare rates side by side.

Once you select a CD, Schwab executes the purchase immediately. The money is deducted from your Schwab cash balance, and the CD is held in your account. You will receive a confirmation showing the issuing bank or credit union, the rate, the maturity date, and the FDIC or NCUA insurance status. There is no commission, markup, or hidden fee for buying the CD.

What happens when your CD matures

On the maturity date, the principal and accrued interest are returned to your Schwab cash balance automatically. You do not have to do anything. At that point, you can reinvest in a new CD, leave the money in your Schwab cash account, transfer it to a linked bank account, or use it for other purposes.

Some CDs have an automatic renewal feature, which means Schwab will reinvest the proceeds in a new CD of the same term at the current rate if you do not take action before the maturity date. Check your CD confirmation to see whether renewal is set to on or off. You can change this setting in your account at any time.

Selling a CD before maturity

If you need access to your money before the CD matures, you can sell it on the secondary market through Schwab rather than breaking it with the issuing bank. When you sell, the price depends on how interest rates have moved since you bought the CD. If rates have risen, your CD will be worth less than you paid because new CDs offer higher yields. If rates have fallen, your CD will be worth more.

Schwab handles the sale and deposits the proceeds into your cash balance. There is no commission for selling, but you will realize a gain or loss depending on the price. This is different from early withdrawal penalties at a traditional bank, which are typically a fixed dollar amount or a set number of months of interest. With a brokered CD, your cost is the market price, which can be larger or smaller than a traditional penalty.

FDIC insurance and how it works with Schwab CDs

Each CD you buy through Schwab is insured separately by the FDIC or NCUA, depending on whether the issuing institution is a bank or credit union. The standard insurance limit is $250,000 per depositor per institution. This means if you buy a $100,000 CD from Bank A and a $100,000 CD from Bank B through Schwab, both are fully insured because they are with different institutions.

However, if you buy two CDs from the same bank through Schwab, the insurance coverage combines. A $150,000 CD and a $150,000 CD from the same bank would total $300,000, meaning $50,000 would be uninsured. Schwab's platform shows you the insurance status of each CD, and the search tool can help you stay within limits if you want to maximize coverage across multiple CDs.

Schwab CD rates compared to other options

Schwab's CD rates reflect the rates offered by the underlying banks and credit unions, not a Schwab rate. Because Schwab aggregates CDs from many issuers, you often find competitive rates without having to shop across multiple websites. However, rates change daily, and some online banks or credit unions may offer higher yields on specific terms.

The advantage of using Schwab is convenience and comparison in one place. If you already have a Schwab brokerage account, buying a CD takes minutes and integrates with your other holdings. If you do not have a Schwab account, opening one is free, though you may find better rates elsewhere for a single CD purchase.

Fees and costs you should know about

Schwab charges no commission, markup, or transaction fee when you buy or sell a CD through its platform. The rate you see is the rate you get. There are no hidden costs embedded in the price.

If you sell a CD before maturity and the price has fallen (because interest rates have risen), you will realize a loss on the sale. This is not a fee—it is the market value of the CD. Similarly, if you sell at a gain, you will owe taxes on the gain in the year you sell. Interest earned on the CD is taxed as ordinary income in the year it accrues, whether you hold it to maturity or sell it early.

Frequently Asked Questions

Can I buy a CD through Schwab if I do not have a brokerage account?

No. You must have a Schwab brokerage account to purchase CDs through their platform. Opening an account is free and takes about 10 minutes online. You can fund it with a transfer from your bank or by depositing a check.

What is the minimum amount I need to invest in a Schwab CD?

Minimums vary by issuer and CD term. Most range from $1,000 to $25,000, though some issuers have lower or higher minimums. Schwab's search tool displays the minimum for each CD before you buy.

Do I pay taxes on CD interest earned through Schwab?

Yes. Interest is taxed as ordinary income in the year it accrues, even if you do not withdraw it. Schwab will send you a 1099-INT form at tax time showing the interest earned on all your CDs. The tax treatment is the same whether you buy a CD through Schwab or directly from a bank.

What happens if the bank that issued my Schwab CD fails?

Your deposit is protected by FDIC or NCUA insurance up to the standard limit. If the bank fails, the FDIC takes over and either transfers your CD to another bank or pays you the insured amount. Schwab does not hold your money—the issuing bank does—so Schwab's financial health does not affect your insurance coverage.

Can I set up automatic reinvestment for my Schwab CDs?

Yes. When you buy a CD, you can choose whether to enable automatic renewal. If enabled, Schwab will reinvest the principal and interest in a new CD of the same term at the current rate on the maturity date. You can turn this on or off in your account settings at any time.