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5 Things to Know for Your First CD

Once upon a time, there were these things called compact discs, a.k.a CDs. Ring a bell, or are we dating ourselves? These days, musical CDs are moving to the side, allowing financial CDs to take the acronym back! If you’ve ever been curious about CDs, we’re going to break it down for you.

In our world, a CD is known as a Certificate of Deposit. It’s a little more serious than a savings account, but not quite as involved as a hands-on investment. You can dip your toes into a higher interest rate for returns on your money. Here’s what you need to know if you’re considering opening your first CD.

The rate is locked until the maturity date.

Whatever rate you start out with, that’s the rate you’ll have until the CD matures, regardless of what is happening with interest rates. That means that if they drop, you’re still safe at your coveted higher rate. However, it also means if they jump, you’ll stay where you are. However, at the end of your CD term, you can renew at the most current rate.

The longer the term, the higher the rate could be.

In general, if you opt for a longer term on a CD, you’ll have a chance at a higher APY. It’s a good rule of thumb to invest a large sum into a long-term CD so that you have a chance to get the most possible out of your money.

Your money is locked up safe after the initial open.

That means whatever you invest when you open the account is the amount you’re fixed with until the CD matures. Unlike a traditional savings account, even with a high interest rate, you cannot continue to add funds through time. 

You’ll have a payday on the maturity date.

CDs come in various terms, ranging from a few months to a few years. During the term, you aren’t able to withdraw funds from your account. The money is considered locked as it grows, so you won’t be able to move it around to another account until the end of the term—called the maturity date.

You have options when it matures.

At the end of your CD term, there are a few things you can do. You could do nothing and let that CD re-invest into another CD of the same term length—however, the new interest rate will be whatever is current and not your previously locked rate. This is also your chance to deposit more funds.

If you chose to take an action, you can transfer your funds from the CD to a checking or savings account and close the CD. Or you could transfer the funds into another CD if there is a better rate or term for you at that time. 

While not as sassy as your old Justin Timberlake CD, a money-related CD is a smart option if you’re saving for a long-term goal, like a wedding or vacation. Or a JT concert. If you know you won’t need to touch your money for a while, this is a great opportunity to watch it grow. Use our calculator to see what you could earn on a CD and check out our 11-Month CD Special.


Erin @ CommunityAmerica

Carolyn, please reach out to us directly at 913.905.7000 and we can help you figure it out! Thanks! - Erin

Carolyn Blair

I need to know when my CD matures. Please let me know

Erin @ CommunityAmerica

Hi Bernadette! Thanks for reaching out. Please give us a call at 913.905.7000 and we'll give you all the info you need :) - Erin

Bernadette Hagerman

I have a CD that’s ready to mature soon at a previous bank. I would like information on switching this to Community America.
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