What is a certificate of deposit (CD)?

A certificate of deposit (CD) is a type of federally-insured savings account that has a fixed interest rate and a fixed date when you can withdraw funds, known as a maturity date.

To open a CD, you must meet a minimum balance requirement and agree not to make a withdrawal from the account for a specified length of time, called a term. Terms are usually 6 to 60 months. There are no monthly fees, and interest accrues beginning the first day of the term, making a CD a very attractive, higher-earning form of savings. At Oregon State Credit Union, you can open a CD account with as little as $500, or $250 for a Scottie or Teen account.

A CD will typically earn a higher interest rate than a Money Market or savings account, and that rate will be fixed, meaning it will not change during the term of the CD. You can earn even better interest by opening the CD with more money or holding the CD for a longer term.

There is a penalty if you withdraw funds from a CD account before the certificate matures, although Oregon State Credit Union allows you to withdraw your earned interest before maturity without penalty. Once the CD has matured, you can roll over the entire balance or a portion of the balance into a new CD. If you do not wish to roll over to a new CD account, you can transfer all or a portion of your funds to another account, like a savings account, or you can withdraw the funds. A simple roll-over or transfer can be set up to occur automatically, saving you time and worry.

Savings, CD, MMA comparison chart