Charles Schwab CD Rates May 2024: Earn up to 5.35% APY (2024)

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Estimate Your Interest Earnings

Charles Schwab is a financial services company that's primarily known for investment products. But it also offers a variety of banking products, including CDs.

Here's what to know about Charles Schwab CD rates, terms, and other details before you open one.

Charles Schwab CD Rates Today

TermAPY (Annual Percentage Yield)
3 Month CDs5.35% APY
6 Month CDs5.32% APY
9 Month CDs5.18% APY
1 Year CDs5.25% APY
18 Month CDs5.15% APY
2 Year CDs5.15% APY

Charles Schwab CD Pros and Cons

  • High CD rates

  • Funds are FDIC-insured

  • No early withdrawal penalties

  • Could lose money if you sell your CD before it reaches maturity
  • Some are callable CDs, meaning the issuer can redeem them before maturity
  • Interest does not compound
  • You must have an existing Charles Schwab brokerage account to open a CD

Charles Schwab CDs: Understanding the Process

Types of CDs Available Through Charles Schwab

Charles Schwab Bank CDs are slightly different than those at many other institutions, as they're brokered CDs — not traditional CDs. This means you can open CDs from several institutions through Charles Schwab. If you need money before the term ends, rather than pay an early withdrawal penalty, you'll sell your CD on the secondary market.

Brokered CDs typically offer flexible terms and higher interest rates than traditional CDs, but they do not compound interest. With Schwab CDs, your earned interest is automatically deposited into your Charles Schwab brokerage account.

Callable CDs

Charles Schwab has callable and non-callable CDs. If a CD is callable, a financial institution can ask for the CD back before the term ends. Callable CDs have a call protection period, so a financial institution usually specifies when the CD cannot be called back. After that time, they could potentially call it back.

Standard Minimum Opening Deposits

Charles Schwab CDs require a minimum of $1,000 to open. This is a standard amount — traditional CDs at banks also usually require a $1,000 minimum opening deposit.

If you don't have that much money to deposit upfront, the best online banks may have CDs that are a better fit. Some online banks have CDs with $0 minimum opening deposits.

What Influences Charles Schwab CD Earnings

Brokered CDs have benefits and disadvantages that could affect how much interest you'll earn on an account. Below, we provide an in-depth overview of what influences Charles Schwab CD earnings.

Call Risk in CD Earnings

One of the disadvantages of opening a callable CD is you might not get all the potential interest earnings if your CD doesn't reach maturity. If your CD gets called back by a financial institution before your term ends, you'll only earn the interest you've received up until that point.

Charles Schwab Partner Banks

Since Charles Schwab offers CDs from various financial institutions, you can access more term lengths and potentially more competitive rate offerings than traditional banks. This is an advantage, especially if you're interested in different offerings from other banks.

Market Conditions and Fed Actions

Market conditions and the Federal Reserve's actions can impact bank CD rates.

For example, Charles Schwab's most competitive rate is for its 3-month CDs. Short-term CDs have higher interest rates than long-term CDs because banks expect the Fed to make rate cuts in the future. Financial institutions still want to have competitive offerings available for customers, so short-term lengths are more competitive.

Overall, banks will usually raise CD rates when the Fed decides on rate hikes and decrease CD rates if the Fed is making rate cuts.

Market conditions can also impact the selling of CDs on the secondary market. For instance, you could potentially lose money if you sell your CD at a lower value than when you first opened the account.

How Charles Schwab CD Rates Compare

Charles Schwab CDs vs. Synchrony Bank CDs

Synchrony Bank CD rates are lower than those offered by Charles Schwab. At Synchrony, rates range from 0.25% to 5.15% APY, depending on the type of CD and its term length.

To be clear, we're not exactly comparing apples to apples. Synchrony Bank offers traditional CDs, which means you're only able to purchase CDs from Synchrony — not several CDs from different institutions at once. Still, Synchrony's CDs do compound interest daily, while Schwab's don't compound interest at all. This could make a big difference in your account's long-term earning potential.

Synchrony offers more variety than Schwab. There are no-penalty CDs, bump-up CDs, and terms range from three months up to five years. There is also a $0 minimum deposit, so you can get started with whatever cash you have on hand.

Synchrony Bank Review

Charles Schwab CDs vs. Discover Bank CDs

Discover® Bank (FDIC Insured) CD rates are lower than Charles Schwab's, with rates ranging from 2.00% to 4.70% APY. They charge early withdrawal penalties that range from three months of interest on shorter-term CDs to up to 24 months of interest on longer terms. Discover also requires a higher minimum deposit ($2,500 versus Schwab's $1,000).

That said, Discover has traditional CDs, not brokered ones. As a result, it compounds interest daily — as opposed to Schwab, which does not compound interest.

Discover Bank Review

Should You Invest in CDs through Charles Schwab?

Charles Schwab CD rates are much higher than the national average. They're brokered CDs, which means you can open accounts with different institutions and sell them if you need access to your money early. In some cases, CD rates through Charles Schwab are even higher than the best CD rates at traditional banks and credit unions — but unlike traditional CDs, brokered CDs don't compound interest. This could limit your earning potential.

Why You Should Trust Us: How We Reviewed Charles Schwab CDs

To review Charles Schwab CDs, we used Business Insider's certificate of deposit methodology, which considers interest rates, minimum deposit requirements, CD term variety, and early withdrawal penalties. (Although we eliminated the early withdrawal category for Charles Schwab, since brokered CDs don't charge these penalties.) We also looked at the institution's overall ethics, quality of its mobile app, and customer service. Then we gave the CD a rating between 0 and 5.

Charles Schwab FAQs

Does Charles Schwab offer the best CD rates?

Charles Schwab offers competitive CD rates compared to online and brick-and-mortar banks. However, these CDs are brokered CDs, which are not the same as traditional ones. Brokered CDs require opening a brokerage account and an understanding of how brokered CDs work.

How often do Schwab CD rates change?

Charles Schwab CD rates can fluctuate at any time. The CD rates will vary depending on Charles Schwab's partner banks. Market conditions and the Fed's actions also influence CD rate trends.

Are Schwab CDs FDIC-insured?

Charles Schwab CDs are FDIC-insured. Up to $250,000 per depositor, per bank is secure.

Does a Schwab CD require a Schwab brokerage account?

You must have a Charles Schwab brokerage account to invest in CDs.

Are there fees for buying Schwab CDs?

There aren't commission fees for buying Schwab CDs.

Aly J. Yale

Aly J. Yale is a writer and editor with more than 10 years of experience covering personal finance topics including mortgages and real estate. She contributes to Personal Finance Insider’s mortgages and loans coverage.ExperienceAly began her journalism career as reporter, and later an editor, for several neighborhood sections of the Dallas Morning News.Her work has been published in several national publications, including Bankrate, CBS, Forbes, Fortune, Money, Newsweek, US News and World Report, the Wall Street Journal, and Yahoo Finance. She’s also contributed to a variety of mortgage and real-estate publications, such as The Balance, Builder Magazine, Housingwire, MReport, and The Mortgage Reports.Her favorite personal finance tip is to schedule regular check-ins to make sure your credit cards, savings accounts, and other financial vehicles still align with your budget and financial goals. She is a member of the National Association of Real Estate Editors (NAREE).ExpertiseAly’s areas of personal finance expertise include:

  • Mortgages
  • Loans
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EducationAly is a graduate of Texas Christian University, where she received a bachelor’s degree in radio/TV/film and news-editorial journalism.

Sophia Acevedo

Banking Editor

Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circ*mstances and overcoming their fears around money.ExpertiseSophia's expertise includes:

  • Bank accounts
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EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.

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Evelyn He is a Compliance and Operations Associate on the Personal Finance team to ensure content accuracy and editorial independence so readers get up-to-date and objective financial advice.The compliance team's mission is to provide readers with fact-checked and current stories so they can make informed financial decisions. The team also works to minimize risk for partners by ensuring language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team.

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Charles Schwab CD Rates May 2024: Earn up to 5.35% APY (2024)


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