Skip to main content

Types of CDs to Maximize Your Earnings

A certificate of deposit (CD) is a great way to invest your money. It typically offers a higher interest rate than a savings account, and some types allow you to add more money throughout the term.

Not all CDs are alike, however. Some offer important benefits and features that may make them a better choice for your needs. The following are five types of CDs that Credit Union of America offers.

1. On-My-Terms Certificate

This CD allows you to pick the ideal term for your needs. You can have a CD for as little as three months or as long as five years. The choice is yours.

The annual percentage yield (APY) you will get with this CD depends on the term, with longer terms having higher APYs. It only takes a minimum of $500 to get started.

The primary advantage of the On-My-Terms CD is that you can pick the length of the term. If you only want to invest your money for a few months, for example, you can do that. However, it’s important to keep in mind that if you choose a long-term CD, the interest rate will be locked in meaning you can’t change it if the rate increases at some point in the future.

2. The 1-Year Add-On Certificate

With many CDs, the initial deposit is all you are allowed to make. If you later decide you want to increase your deposit amount, you will have to take out an additional, separate CD. With an add-on CD, however, you are allowed to deposit additional money during the term.

For example, if you make an initial deposit of $1,000, but you later want to add another $500 before the maturity date, you can do that. You can contribute additional money to your CD as often as you like.

With this CD, you can get started with as little as $100 and the minimum add-on amount is $10.

Add-on CDs are ideal for those who want to save for something, like a down payment on a home or vehicle. They allow you to deposit additional money while taking advantage of interest rates that may be higher than other interest-bearing accounts.

3. 30-Month Bump Certificate

A bump CD is ideal for when interest rates are rising. While most CDs have fixed interest rates, a bump CD allows you to move up to a higher rate if one is offered. A minimum of $2,500 is required to get started.

If you have a 30-month bump CD and the interest rate increases after two years, for example, you can "bump up" to the higher rate that is currently being offered on the 24-month CD for the rest of your term. When bump CDs are offered, however, they usually only allow you to switch interest rates one time.

4. Save to Win Certificate

With this CD, you have the chance of winning a cash prize drawing of up to $5,000. A minimum of $25 is required to get started and you’ll get an additional entry for each additional $25 you add to your deposit balance. The Save to Win CD has a 12-month term and add-ons are permitted.

This CD is ideal for those who have short-term savings goals because you can add to it every time you get paid or whenever you have some extra cash. Also, the additional entry you get for the cash prize drawing is a strong incentive to continue adding to your CD to help you achieve your savings goal.

5. Special Certificates

A special certificate offers something different than a typical CD but is only available for a specific amount of time. This type of certificate may offer a higher APY, for example, if you deposit your money for a certain term length. So if there’s a 12-month term with a higher APY—but you really need a 30-month term—then this would not be an ideal option for you.

Typically, a minimum of $500 is all that’s required to get started with Credit Union of America’s special certificate.

How Long Does a Certificate of Deposit Last?

CDs can have different maturity dates. Most financial institutions offer CDs with terms of 3-60 months. Typically, the longer the term, the more the CD will pay in interest.

Are Certificates Safe During a Recession?

CDs are very safe during recessions. Your deposit accounts at Credit Union of America are federally insured by the National Credit Union Administration (NCUA) for up to $250,000. If your CD is with a bank, funds are generally insured by the Federal Deposit Insurance Corporation (FDIC). If your CD is with a credit union, these are typically insured by the National Credit Union Administration (NCUA). Please see your specific bank or credit union for details on deposit insurance.

Can I Have More Than One Certificate at a Time?

You can have as many CDs at a time as you like. Some people use a strategy known as laddering CDs which involves having multiple CDs with different maturity dates. The purpose is to earn as much interest as possible while also having money frequently coming due.

Certificates of Deposit With Credit Union of America

Opening a certificate of deposit with Credit Union of America has never been easier. You can open one in person at one of our branch locations, or you can open one online through digital banking by selecting “Open and Apply.”

Click on the following link to learn more about our CDs. With the variety of options we offer, you are sure to find one that meets your needs.


View All Articles