Charles Schwab CD Rates | The Motley Fool (2024)

Charles Schwab CD rates are some of the best in the business. These CDs offer you high rates and the power to trade your CDs on a secondary market. It's a great option for investors with at least $1,000 to invest. In our Charles Schwab CD review, we'll dive into the details so you can decide whether opening a CD account with Schwab is right for you.

Charles Schwab CD rates for 2024

Rates as of June 7, 2024

APY = Annual Percentage Yield

Charles Schwab CD Rates | The Motley Fool (1)

Charles Schwab CD

MINIMUM DEPOSIT $1,000

3 Mo. APY6 Mo. APY1 Yr. APY1.5 Yr. APY2 Yr. APY3 Yr. APY4 Yr. APY5 Yr. APY
5.51%5.47%5.40%5.15%5.25%4.65%4.75%4.65%

Compare Charles Schwab CD rates

Charles Schwab CDs offer a one-two combo of high rates and many term options. See how they compare to the competition.

Rates as of June 7, 2024

Bank & CD OfferAPYTermMin. DepositNext Steps

Discover® Bank CD

Member FDIC.

APY:4.70%Term:1 YearMin. Deposit:$2,500

Open Account for Discover® Bank CD

Western Alliance Bank CD

APY:5.25%Term:1 YearMin. Deposit:$1

Open Account for

Western Alliance Bank CD

APY:5.10%Term:9 MonthsMin. Deposit:$1

Open Account for

Overview of Charles Schwab CDs

Charles Schwab partners with banks to offer you many CD terms and rates. Since Schwab offers CDs through its brokerage account, CDs don't earn compound interest. Plus, instead of withdrawing early and paying fees, you must sell CDs on the secondary market to cash out fast.

Minimum Deposit$1,000
Range of Term Lengths3 months to 10 years
Compounding ScheduleNo compound interest; only simple interest
Early Withdrawal PenaltyN/A
Grace PeriodN/A

Data source: Charles Schwab.

Charles Schwab CD pros and cons

Charles Schwab offers brokered CDs, which differ from traditional bank CDs. For one, Charles Schwab doesn't issue the CD itself but rather purchases it (along with a bulk of others) from a CD provider, like a bank. Because it's not the CD issuer, Charles Schwab can shop around at many different banks, find the best CD rates, buy them in bulk, then offer them to you, the client.

Let's take a look at some of the pros and cons of these CDs.

Pros

  • Competitive CD rates
  • Wide variety of term lengths
  • Potential to expand FDIC insurance

Cons

  • Charles Schwab brokerage account required
  • Money grows by simple interest
  • Minimum deposit of $1,000
  • Not easy to liquidate

How much can you earn with a Charles Schwab CD?

Rates change, but you can lock in a great rate by opening a CD account. Here's a table illustrating what potential earnings could look like if you deposited $1,000 into a Charles Schwab CD.

The numbers in the table below may not be accurate to current APYs and are for example purposes only.

TermAPYEarnings
3 months5.51%$13.78
6 months5.47%$27.35
1 year5.40%$54.00
1.5 years5.15%$77.25
2 years5.25%$105.00

Data source: Author's calculations.

Charles Schwab CDs don't pay compound interest. In other words, the CD rate will apply to your principal only, not to any interest you've built up. This is common for brokered CDs, but differs from bank CDs, which often calculate interest on a more profitable compound model.

Is a Charles Schwab CD safe?

Charles Schwab CDs are safe places to put your money. All Schwab's CD banking partners are FDIC insured, so you're covered up to $250,000 per bank. This means you can protect more than $250,000 by spreading your money across Schwab partner banks.

How to open a Charles Schwab CD

You can open a Charles Schwab CD by following these steps:

1. Open a Charles Schwab brokerage account

You can do this on the Charles Schwab website. Have the following handy: your Social Security number (or Tax Identification number), your employer's name and mailing address (if it has one), your email address, and cellphone number.

2. Log into your Charles Schwab account

Navigate to the "Trade" dropdown and click "CDs."

3. Search for CDs

You can filter CDs offered by partner banks. All partner banks are FDIC insured.

4. Choose a CD to buy

Click the "Buy" button to choose the CD you want.

5. Enter the amount you want to invest

You must invest a minimum of $1,000 and in increments of $1,000.

6. Review your order

Check that everything looks good by clicking "Review Order." Double-check the estimated total cost to be sure you entered the right amount.

7. Complete your purchase

Click "Place Order" to complete your purchase and review any important documents.

Who is a Charles Schwab CD right for?

A Charles Schwab CD is right for investors who want to invest in multiple high-paying bank CDs through one broker. If you're a current Schwab customer, you can link to your current account.

Other Charles Schwab CD accounts

Charles Schwab also offers the following CD accounts:

  • Callable CDs
  • Step-Up CDs
  • Zero-Coupon CDs

Bottom line: Charles Schwab CD rates

Charles Schwab CD

  • 3 APY: 5.51%
  • 6 APY: 5.47%
  • 12 APY: 5.40%
  • 18 APY: 5.15%
  • 24 APY: 5.25%
  • 36 APY: 4.65%
  • 48 APY: 4.75%
  • 60 APY: 4.65%

Show All Rates [+]Hide All Rates [-]

Rates as of June 7, 2024

APY = Annual Percentage Yield

Term

Charles Schwab CD

3 Mo.

6 Mo.

1 Yr.

1.5 Yr.

2 Yr.

3 Yr.

4 Yr.

5 Yr.

5.51%

5.47%

5.40%

5.15%

5.25%

4.65%

4.75%

4.65%

Keep reading about Charles Schwab:

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  • Charles Schwab Promotions of 2024
  • Charles Schwab vs. Fidelity
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  • Charles Schwab vs. Webull
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  • Charles Schwab vs. Interactive Brokers
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  • Charles Schwab vs. Betterment
  • Charles Schwab Bank Review
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Our CDs methodology

At The Motley Fool Ascent, certificates of deposit (CDs) are rated on a scale of one to five stars, primarily focusing on annual percentage yield (APY) and early withdrawal penalty fees. Our highest-rated CDs generally include competitive APYs without complex qualification tiers, low withdrawal fees, reliable brand trust and reputation, and ease of use.

Learn more about how The Motley Fool Ascent rates bank accounts.

FAQs

  • $1,000 is the minimum deposit for Charles Schwab CDs.

  • There is no fee for purchasing a Charles Schwab CD. However, there is a $1 fee per CD you sell on the secondary market, with a minimum of $10 and a maximum of $250. (Secondary market sales are optional.) Broker-assisted CD trades cost $25 per trade, on top of other fees.

  • No, you cannot close a Charles Schwab CD early, but you can resell your CD on the secondary market. On one hand, that means you can potentially sell any of your CDs at any time, possibly for a profit. On the other hand, sometimes there are no buyers, and you may end up selling your CD at a loss. Depending on market conditions, you may be unable to sell your CD at all.

Charles Schwab CD Rates | The Motley Fool (2024)

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