Certificates of deposit (CDs) are deposit accounts that earn interest on — your guessed it — your deposited cash. They’re often called “locked” savings accounts since you can’t withdraw your deposit or the earned interest before the term ends without paying penalties.
CDs are deposit accounts with deposit insurance and are considered a safe way to grow your savings. Normally, you make a deposit, choose a term and earn interest on your deposit over the term’s duration. If you close the CD before the term is over, you’ll likely pay early withdrawal penalties.
A callable CD is one where the issuer (bank or credit union) can terminate the CD before its maturity date, a process referred to as “calling” the CD or using a call feature or call-away option.
In short, the issuer can close a callable CD before the actual term is up, unlike a traditional CD, which offers guaranteed returns if you keep it open the whole time.
When the issuer “calls” the CD, you get your initial deposit plus any interest earned up to that point, but you lose out on the future interest you would have earned if the CD had matured as scheduled.
To compensate for the bank’s ability to terminate the CD early, callable CDs tend to have higher interest rates than normal CDs. So in a nutshell, callable CDs gives the bank more leverage, but you usually get a higher interest rate in return.
Most callable CDs include a “call protection period” or a “noncallable period,” which is a set time frame during which the bank cannot call the CD. This period usually ranges between six to 12 months, depending on the CD’s terms.
After the protection period is over, the CD enters into the callable date, which is when the bank can terminate it. In most cases, the issuer can call the CD once every six months to end it, but it depends on the issuer.
In most cases, issuers call away CDs if rates drop so they can stay competitive and avoid offering higher rates than other banks. Conversely, if rates are going up, the issuer is less likely to terminate your callable CD’s term.
If you expect market rates to be steady, a callable CD might be worth the risk. If you’re seeing big ups and downs in CD offerings, that might be a sign that a callable CD might be terminated early. If you’d prefer to avoid that risk, a regular CD might be more for you.
Callable CDs aren’t a very common CD type, but here are three institutions that offer them:
Callable CDs have their positives, but like most investing and saving methods, they have downsides to consider.
Narrow down top CDs by APYs and minimum deposit. For a better comparison, tick the Compare box on multiple accounts to see their benefits side by side.
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How we picked theseThe Finder Score analyzes hundreds of CDs from more than 100 institutions. It takes into account the product's interest rate for available terms and opening deposit requirements - this gives you a simple score out of 10.
Different banks and credit unions offer CDs for various lengths of time, ranging from as short as seven days to as long as 20 years. For our ratings, we consider the term lengths that the FDIC uses in its monthly updates on national rates.
If a bank or credit union doesn’t offer a CD for a specific term used by the FDIC, we don’t penalize it: Instead, we simply don’t rate it. Each of the standard term lengths has its own APY rating based on the FDIC’s average rates.
Callable CDs aren’t very commonly offered. In most cases, you’ll have to opt for a brokered CD with a callable option.
For other ways of growing your nest egg, compare more savings accounts and options.
At CD maturity, you can roll over your money into a new CD or cash it out and move your money to a checking, savings or investing account.
Compare, choose and apply for a certificate of deposit on finder.com. Competitive interest rates from leading financial institutions in the US.
The highest CD rates in Texas are from Ciera Bank, Quontic Bank, Susser Bank, Ally Bank and more. See the full list here.
Some of the highest CD rates in Florida are from Quontic Bank, Alliant Credit Union, First Internet Bank and more. See the full list here.
Some of the highest CD rates in Michigan are from Alliant Credit Union, Quontic Bank, First Internet Bank, Ally Bank and more. See our full list here.
Savings rates are dropping, but you can lock in a high-APY CD without penalties for early withdrawal. Sallie Mae and Marcus CDs top our list.
Finding the best CD rate is vital to ensuring that your savings balance grows to the maximum amount possible in the shortest time.
See what the average interest rate was in the US for 3-month, 60-month, 1-year, 3-year and 5-year CDs since 2009 and learn how the economy affects rates.
Money market accounts offer easy access to your money, while CDs lock your savings away for a set time and often have higher interest rates.