Are there fees to open or maintain a CD?

By Sabrina Karl

If you’ve noticed the news stories over the last several years about the rising frequency of bank fees, and are considering stashing some of your savings in a certificate of deposit, you might wonder what fees you could encounter with a CD.


The good news is that it’s a rare CD that will hit you with any fees.


With the basic model of a certificate of deposit being that you agree both to invest a certain dollar amount with the bank or credit union for a predetermined number of years and not withdraw the funds until the term expires, there are almost no transactions involved with a CD, other than its inception and maturity.


As a result, banks generally don’t charge any fees for opening a CD, nor for maintaining it through its term.


That said, a couple specific instances could incur a fee or penalty in your CD account. The most common is the early withdrawal penalty, which is triggered if you withdraw any of the CD’s balance before maturity.


Each bank’s early withdrawal penalty is self-determined, and is typically calculated as a number of months’ interest deducted from the CD’s balance before the bank returns your funds. But the penalties vary widely, so it’s important to check a bank’s policy before opening a certificate with them.

Another fee that a small number of CDs charge is for paper statements. Occasionally, a CD will carry a condition that only electronic statements are allowed — it might even be called an eCD. So requesting paper statements could land you in monthly fee territory.


For the vast majority of CD savers, though, the experience will be fee-free: you’ll deposit your funds, let them sit and earn interest for the term, and withdraw the principal and earnings in full at the end.