The main places to buy CDs online
You can buy CDs from three types of institutions: traditional banks with online platforms, online-only banks, and brokerage firms. Each sells the same basic product—a certificate of deposit where you lend money for a set time in exchange for a fixed interest rate—but they differ in how many options they show you, what rates they offer, and what happens to your money if the institution fails.
Traditional banks like Chase, Bank of America, and Wells Fargo let you open a CD through their websites. Online-only banks like Marcus, Ally, and Discover often pay higher rates because they have lower overhead costs. Brokerage firms like Fidelity, Charles Schwab, and Vanguard sell CDs from multiple banks on a single platform, which lets you compare hundreds of options without opening separate accounts.
Key Takeaways
- Online-only banks typically offer higher CD rates than traditional banks because they spend less on physical branches.
- Brokerage platforms let you compare CDs from dozens of banks at once, rather than checking each bank's website separately.
- All deposits up to $250,000 per account owner at FDIC-insured banks are protected if the bank fails, regardless of where you buy the CD.
- CD rates change daily, so the highest rate today may not be the highest rate when you are ready to buy.
- Some platforms charge early withdrawal penalties if you need the money before the CD matures; others do not.
Online-only banks and their rate advantage
Online-only banks pay higher rates on CDs than traditional banks because they do not maintain physical locations, customer service centers, or the staff those require. Marcus (owned by Goldman Sachs), Ally Bank, and Discover Bank are the largest, but smaller ones like Connexus Credit Union and Pentagon Federal Credit Union also compete for CD deposits. You can see their current rates on their websites without opening an account first.
The trade-off is that you have fewer options. An online-only bank offers maybe five to ten CD terms—say, 3-month, 6-month, 1-year, 18-month, 2-year, 3-year, and 5-year. A brokerage platform may show you hundreds. If you want a 13-month CD or a 4-year CD, an online-only bank may not have it, but a broker probably will.
Opening a CD at an online-only bank takes 10 to 15 minutes. You provide your name, address, Social Security number, and bank account details for the money transfer. The CD opens within one business day.
Brokerage platforms and CD ladders
Brokerage firms like Fidelity, Charles Schwab, and Vanguard act as middlemen. They show you CDs from dozens of banks and credit unions in one place, and they handle the paperwork. You do not open a separate account at each bank; instead, you buy the CD through the brokerage, and the brokerage holds it for you.
This matters most if you want to build a CD ladder—a strategy where you buy multiple CDs with different maturity dates so that one matures every few months or years. Instead of visiting ten bank websites, you can compare and buy all ten CDs from one brokerage dashboard. Fidelity and Schwab both let you set up automatic reinvestment, so when a CD matures, the money rolls into a new one at the current rate.
Brokerage CDs are still FDIC-insured up to $250,000 per bank, but the brokerage itself does not hold the money—it passes it to the issuing bank. This is important only if the brokerage fails, which is rare because brokerages are regulated by the SEC and FINRA, not just the FDIC.
Traditional banks and when they make sense
If you already bank with Chase, Bank of America, Wells Fargo, or another traditional bank, you can open a CD through their website without switching institutions. The rates are usually lower than online-only banks or brokerage platforms, but the convenience of keeping everything in one place appeals to some people.
Traditional banks also offer relationship benefits. If you maintain a high balance across checking, savings, and CD accounts, some banks waive fees or offer higher rates. If you need to speak to someone by phone, traditional banks have customer service centers open during business hours. Online-only banks and brokerages offer phone support too, but the experience varies.
One advantage of traditional banks: if you need to withdraw money early, some offer no-penalty CDs where you can take your money out without losing interest. These rates are lower than regular CDs, but they exist. Online-only banks and brokerages sell them too, but traditional banks invented them and still market them heavily.
How to compare rates across platforms
CD rates change daily based on what the Federal Reserve does and what banks think will happen next. A rate that is highest today may not be highest next week. Websites like Bankrate, DepositAccounts, and DepositAccounts track current rates across hundreds of banks and update them multiple times per day.
When you compare, look at three things: the interest rate (expressed as APY, or annual percentage yield), the term length (how long your money is locked in), and the early withdrawal penalty (what you lose if you take the money out early). A CD paying 5.00% APY for 1 year is not the same as one paying 4.80% APY for 2 years, even if both are from the same bank.
Write down the top three or four options that match your timeline, then visit each platform directly to confirm the rate is still available. Rates can change between the time you see them on a comparison site and the time you log in to buy.
What to check before you buy
Before you click "open CD," verify three things. First, confirm the bank or credit union is FDIC-insured or NCUA-insured (for credit unions). You can search the FDIC's BankFind tool or the NCUA's Credit Union Locator on their websites. If the institution is not insured, your money is not protected if it fails.
Second, read the early withdrawal penalty. Some CDs charge a flat fee (like $25). Others charge a percentage of interest earned or a number of months' worth of interest. If you think you might need the money early, a no-penalty CD or a shorter term makes more sense than a 5-year CD with a steep penalty.
Third, check how the CD renews when it matures. Some banks automatically roll the money into a new CD at the current rate. Others move it to a savings account and send you a notice. If you do not want the money reinvested, you need to know how many days you have to withdraw it or move it elsewhere before it locks in again.
Frequently Asked Questions
Is it safe to buy a CD online from a bank I have never heard of?
Yes, as long as the bank is FDIC-insured. The FDIC insurance protects your deposit up to $250,000 per account owner, regardless of the bank's size or reputation. You can verify FDIC insurance on the FDIC's BankFind website by searching the bank's name.
Can I buy a CD from a brokerage if I do not have a brokerage account?
You will need to open a brokerage account first, but it is free and takes about 10 minutes. Fidelity, Schwab, and Vanguard all allow you to open an account online with just your Social Security number and bank details. You do not need to buy stocks or mutual funds; you can use the account solely for CDs.
What happens if the bank that issued my CD goes out of business?
The FDIC takes over the CD and honors it at the original rate and term. You will receive your full balance plus accrued interest up to $250,000. The process usually takes a few weeks, and you may have temporary limited access to the money during the transition.
Do I have to buy a CD from the same bank where I have my checking account?
No. You can buy a CD from any FDIC-insured bank or credit union, even if you have never done business with them before. Many people buy CDs from online-only banks or through brokerages while keeping their checking account elsewhere.
Can I move a CD to a different bank before it matures?
Not directly. You would have to withdraw the money (and pay the early withdrawal penalty) and then buy a new CD elsewhere. Some brokerages let you sell a CD on a secondary market before maturity, but this is rare and may result in a loss if rates have risen since you bought it.