Protect Your Finances with a Certificate of Deposit

Explore risk-free investment options like FDIC Insured CDs

As you accumulate savings, it is import to explore interest-generating options for growing your wealth and protecting your finances. Including a certificate of deposit (CD) in your savings portfolio offers you a high interest, risk-free investment option. However, before you invest, it is important to understand how to safely utilize CDs to get the most for every dollar.

Understanding how a certificate of deposit works

Certificates of deposits offer a series of risk-free investment benefits, which differentiate them from other types of savings accounts. When you invest money into a certificate of deposit, you are allocating a fixed amount of your savings for a contracted amount of time. During the time your money is invested, the bank agrees to pay you a fixed interest rate with a higher yield than a traditional savings account. Banks can offer a competitive rate because you are agreeing to commit your money to them until the date of maturity on the CD. Banks also pay out higher percentage yields the longer the term of a certificate of deposit. So, you would typically be offered a better interest rate on a 5 year CD, than you would on an 18 month CD.

Know how and when to invest in a certificate of deposit

Once you accumulate a balance in your savings account and are comfortable investing a portion of it for a designated period of time, you may want to choose a certificate of deposit. Although you will forego immediate access to that portion of your savings, you will be able to collect a higher return and can benefit from the security of a risk-free investment insured by the Federal Deposit Insurance Corporation (FDIC).

Tip: If you are interested in investing in a CD to maximize your returns, but are hesitant to commit all of your savings for a period of years, you may want to talk to your banker about CD laddering. When you ladder your CDs, you invest in multiple CDs with maturity dates that range from a period of months to years. This frees up portions of your investment at different points of time, giving you the option to renew or cash out. Plus, it allows you to invest a portion of your savings in longer term, higher yield CDs.

FDIC insurance makes certificates of deposit a risk-free investment option

The FDIC guarantees the return of money invested in certificates of deposit and other savings products, which can provide protection for your finances. But, before investing your money in a certificate of deposit, it is important to understand the FDIC conditions that apply to this risk-free investment.

  • FDIC protection on your finances only applies if the bank that you invest with is FDIC Insured.
  • The sum of your investments at an institution is guaranteed up to a certain amount set by the FDIC. You can find out the current dollar cap and other insurance details by visiting the FDIC website.

Keeping this risk-free investment opportunity free of penalties

Although the money you invest in a certificate of deposit is insured by the FDIC, there are potential penalties you could incur. To maximize your earnings and avoid unnecessary loss on your investment, you should know that:

  • There are penalties for withdrawing your money prior to your CDs maturity date. Always ask to see the terms of the CD in writing before committing your investment.
  • There is a difference between the call date on a certificate of deposit and the date of maturity. Make sure that when you are talking with your investment banker you understand that a callable CD can be terminated by the bank on the call date, but you cannot voluntarily withdraw your money free of penalty at that time. You can only withdraw your money without penalty on the CD's maturity date.

Open a certificate of deposit to protect your finances at Citizens Bank

Get the most out of your savings when you make a risk-free investment in a certificate of deposit from Citizens Bank. For more information, speak to customer care representative at 1-877-360-2472, or explore our certificate of deposit options online. Of course, if you are ready to invest, you can start your CD application today.


Branch/ATM Locator

Over 1,100 branches close by.


Contact Information

Receive Email Updates

Sign up now to receive offers and updates from Citizens Bank.