If you have money you want to grow safely and you know you will not need it right away, a Certificate of Deposit may be worth considering. A CD is a deposit account with a set term and a fixed interest rate for that term. You deposit money for a defined period, leave it in the account until maturity, and earn interest along the way.

The trade-off is simple: a CD can provide predictable earnings, but it is not designed for money you may need at a moment’s notice. If funds are withdrawn before the term ends, an early withdrawal penalty may apply.

A Certificate of Deposit, or CD, is a deposit account with a fixed term and a fixed rate for that term. CDs can fit money tied to a known future goal because the return is predictable, but they are less flexible than savings or money market accounts because early withdrawals may trigger a penalty.

What Is a CD Account?

A Certificate of Deposit is built around a specific term. Instead of moving money in and out the way you might with a checking or savings account, you choose a term, make the required opening deposit, and keep the money in the CD until the maturity date.

Because CD rates and available terms can change, compare current options on Capital Bank’s rates page or speak with a Capital Bank Savings Specialist before opening an account.

How CDs Work, Step by Step

1. Choose a term. Your term is the length of time your money will stay in the CD.
2. Deposit your money. The opening deposit must meet the minimum for the term selected.
3. Lock in the CD rate for the term. CDs are designed for predictable earnings during the selected term.
4. Leave the funds in place until maturity. Withdrawing before the term expires may result in a penalty.
5. At maturity, decide what comes next. Depending on the account terms available at that time, you may be able to withdraw, renew, or move the funds.

What Does APY Mean?

APY stands for Annual Percentage Yield. It is commonly used to compare deposit account earnings because it reflects the effect of compounding over a year. When reviewing CD options, compare APY rather than looking only at the interest rate.

When a CD Can Make Sense

• You have money set aside for a known future goal.
• You do not expect to need the funds before the CD matures.
• You want predictable earnings instead of a variable-rate account.
• You are comfortable trading liquidity for a fixed term.
• You want to separate longer-term savings from everyday spending money.

When a CD May Not Be the Right Fit

• You are still building an emergency fund.
• You may need the money before the maturity date.
• You want the ability to keep adding and withdrawing money regularly.
• You are looking for a transaction account for everyday spending.

CDs vs. Savings and Money Market Accounts

CDs are not the only way to save. A Personal Savings account may be a better fit for starter savings, emergency funds, and automatic transfers. A Money Market Account may be a better fit for larger balances where access and tiered interest matter. A CD can be useful when the timeline is known and the saver can leave the money untouched.

FAQ

Are Capital Bank CDs FDIC insured?

Capital Bank CDs are insured through Capital Bank’s FDIC membership, subject to applicable limits. Customers with larger balances should confirm coverage limits and account ownership details before opening or renewing a CD.

Can I add money after opening a CD?

Most CDs are opened with a set initial deposit rather than ongoing contributions. If you want to keep adding money regularly, a Personal Savings or Money Market Account may be a better fit.

What happens if I withdraw CD funds early?

A penalty is incurred for withdrawing CD funds before the term expires. Confirm the specific penalty before opening a CD.

Where can I compare Capital Bank CD rates?

You can review our rates page for current rate information and confirm terms with a Capital Bank Savings Specialist before opening an account.