Charles Schwab CD Rates: Earn up to 5.65% APY

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Charles Schwab Bank CD

Insider’s Rating

A five pointed star

3.75/5

Annual Percentage Yield (APY)

5.46% to 5.65%

Minimum Deposit Amount

$1,000

Pros

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Ability to get competitive interest rates from different banks

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Variety of CD terms

Cons

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$1,000 minimum opening deposit

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Interest earned may vary depending on market risk/call risk

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Interest is not compounded

Insider’s Take

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.

Product Details

Through Schwab CD OneSource, you’ll choose from CDs at different financial institutions
Terms may range from 1 month to 20 years
No early withdrawal penalties, but if you need funds before your CD matures, Charles Schwab will sell the CD at the current market rate; the amount of accrued interest for a CD may vary
FDIC insured though Charles Schwab & Co., Inc

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.

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.

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

Charles Schwab CD Rates

Charles Schwab CD Rates Pros and Cons

Charles Schwab CD Rates FAQs

Yes, Charles Schwab CD rates are much higher than the national average. You may be able to snag one of the highest rates out there — but Charles Schwab CDs don’t compound interest.

Yes, all Charles Schwab brokered CDs are bought through FDIC-insured banking institutions. This means up to $250,000 is protected at each individual bank.

Charles Schwab CDs are brokered CDs, which means buying one lets you open CDs from several banks at once. Brokered CDs tend to have higher interest rates and more flexibility than traditional CDs, as you can sell them at any time. They do not compound interest; when interest is paid, it is deposited into your Schwab brokerage account.

You’ll need to deposit at least $1,000 to open a Charles Schwab CD.

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 2.25% to 5.50% 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 CD rates are lower than Charles Schwab’s, with rates ranging from 2.00% to 5.20% 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

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

To review Charles Schwab CDs, we used Personal Finance 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.

Aly J. Yale is a freelance writer, specializing in real estate, mortgage, and the housing market. Her work has been published in Forbes, Money Magazine, Bankrate, The Motley Fool, The Balance, Money Under 30, and more.
Prior to freelancing, she served as an editor and reporter for The Dallas Morning News. She graduated from TCU’s Bob Schieffer College of Communication with a focus on radio-TV-film and news-editorial journalism. Connect with her on Twitter or LinkedIn.