Flexible Term CDs

Understanding flexible CDs and how they can complement your savings portfolio

If you are looking to earn higher interest, but are hesitant to commit your money to a fixed-term CD, you may find it beneficial to invest in a flexible CD. With flexible rate CDs you can still earn interest on your savings while either retraining penalty-free access to a portion of your funds or being able to change CD terms along the way.

Flexible vs. Traditional CDs

Flexible CDs offer many of the perks of a traditional CD, but with more options. Traditional CDs tend to have higher interest rates than flexible CDs, but offer less wiggle room. With some flexible CDs, you have the ability to take out money against your CD and return it when you have it again. With others you can take advantage of interest rate hikes by bumping up to a higher rate at any time. To get the most out of a flexible CD you have to understand the terms you may be offered.

Learn about different flexible CDs

Not all flexible term CDs are the same. Some flexible CDs may have different terms depending on the provider, so it's important to make sure you understand the terms and conditions before making a commitment. When you're in the market for a flexible CD, it's best to know what fits your needs so that you can choose what's right for you. Some popular terms for flexible certificates of deposit include:

  • Bump-up. A bump-up flexible CD allows you to "bump-up" to higher CD rates, even in the middle of your contract. Some banks may restrict the terms of the "bump-up" and how many times you are able to advance interest rates, so be sure to check the CD's contract before you bump-up.
  • Liquid. Liquid CDs have a higher minimum to open, but you can borrow up to half of your CD without incurring a penalty fee. Though liquid CDs carry a lower interest rate, you may still accrue more money with a liquid CD than a traditional CD with penalty fees.
  • No-penalty. No-penalty CDs have the same terms as liquid and "bump-up" CDs, but with a different name. No-penalty CDs may also let you end your contract before your CD matures without a penalty. As always, be sure to know to your contract's requirements and restrictions.

How to determine which flexible CD is right for you

Depending on your life stage, different CDs might be right for you. If you're just buying a home or starting a family, a liquid CD may be a great idea in case you're in the need for a little extra money. However, if you're in a later stage in your life and you're saving for retirement, a bump-up CD might be a better option to get the most for your money.

Potential risks with flexible rate CDs

Some banks offer automatic "bump-up" CDs where your interest rate will automatically bump up to a higher rate when it becomes available. However, the opposite may also be true—your rate will automatically "bump-down" when rates are lowered. If you're willing to risk having a lower interest rate, this type of CD may pay off in the end.

Flexible CDs from Citizens Bank

Even in the event of an emergency, Citizens Bank can help get you what you need. Citizens Bank has many certificate of deposit options to get your savings on the right track. To find out more about flexible terms CDs, call 1-877-360-2472 or apply online today.


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