Banking » Reviews » Charles Schwab CD Rates
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Charles Schwab CD Rates

Charles Schwab offers brokered CDs and very competitive rates. The terms are between one to 18 months and there is a $1,000 minimum deposit
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

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Charles Schwab is primarily known as an investment platform, but it also has a line of banking products including checking accounts, savings accounts and CDs. Charles Schwab CDs are available with a variety of terms and a reasonable minimum deposit requirement.

Schwab CDs

APY Range

4.73% – 5.05%

Minimum Deposit

$1,000

Terms

1 month – 18 months

Fees

$0

Schwab CDs

APY Range

4.73% – 5.05%

Minimum Deposit

$1,000

Terms

1 month – 18 months

Fees

$0

Charles Schwab CD Rates

By their nature, brokered CDs tend to be highly competitive compared to other banks. This is because Charles Schwab has access to products from across the marketplace including exclusive brokerage only products and deals.

Schwab offers some of the highest rates for 18 month term.

CD Term
APY
1-3 Months
4.78%
4-6 Months
4.96%
7-9 Months
5.03%
10-18 Months
5.15%

How Charles Schwab CDs Work

The key difference between Charles Schwab CDs and regular bank CDs is that Charles Schwab offers brokered CDs. Essentially, this means that you can access CDs from hundreds of different banks who offer exclusive deals for brokers.

Charles Schwab CDs are available with terms of one month to five years, with the higher yields offered with the longer term CDs allowing you to lock in your rate. There is a minimum deposit requirement of $1,000 and you can invest further increments of $1,000, creating a reasonable barrier to entry. The firm can also assist you in creating CD ladders to ensure that you have CDs that mature periodically according to your investment goals.

You can speak to a Charles Schwab specialist to obtain non commissioned, objective guidance on CD strategies including ladders and other fixed income products to choose the right investment products to meet your goals.

One of the attractive features of Charles Schwab CDs is that there are no early withdrawal penalties. If you need access to your funds before the CD matures, Charles Schwab will help you to sell your CD via its secondary market. This involves the team requesting bids for your CD and they will contact you with the highest bid.

Should you choose to accept the bid, you'll receive this amount plus any of the accrued interest. However, there are no guarantees that you will get your original investment amount back. If market conditions have changed and new issue CDs are offering higher rates, you are less likely to get back your full investment amount.

Are Schwab CD Rates Competitive Compared to Banks?

When you compare Charles Schwab CD rates with the rates from traditional banks, you’ll notice that the rates are several times higher.

Traditional banks tend to offer less than the national average rate, which is currently 1.53%, but you can find banks such as Citi , Bank Of America or Wells Fargo offer decent rates , but less compared to Schwab.

On the other hand, online banks tend to offer high returns, which are comparable with Charles Schwab CD rates. 

Financial Institution
CD APY
American Express
1.00% – 4.50%
Marcus
3.70% – 4.75%
Capital One
3.30% – 5.00%
Discover Bank
2.00% – 4.75%
Quontic
3.75% – 4.45%
CIT Bank
0.30% – 4.65%
BMO Harris
0.05% – 4.50%
Ally Bank
2.00% – 5.00%
Citi Bank
0.05% – 4.21%
TIAA Bank
4.40%

Charles Schwab CD vs Savings Rates

Charles Schwab does have a savings account, but it is not particularly attractive when compared to many of the savings account offerings from online banks and some traditional banks. 

The rate is low compared to Charles Schwab CDs, but you have the flexibility to add and withdraw funds to the account as you please. You’ll even have an ATM card with unlimited rebates for ATM fees worldwide. The account also has no monthly fees or account minimums.

So, while the rate is far lower than the Charles Schwab CD rate, if you’re looking to build a savings fund, the savings account is a more appropriate product. However, it may be worth your while to shop around, as there are online savings accounts offering similar feature sets and higher rates.

About Charles Schwab

Charles Schwab is a multinational finance company that is best known for its investment platform, but it does have a limited banking product line including checking and savings accounts, home loans and credit cards.

The institution has a history dating back almost 70 years, unfortunately, it does not have a great reputation with consumers. The current Trustpilot rating for Charles Schwab is poor and there are numerous complaints about customer service issues and product problems.

So, unless you are an existing customer of Charles Schwab, you may want to think carefully about whether Charles Schwab CDs are the right choice for you.

FAQs

No, as Charles Schwab CDs are brokered CDs, which means that if you need to release your funds, you can sell your CD on a secondary market without paying a standard fee. You can check out other no penalty CDs.

Charles Schwab offers access to CD products from across the marketplace, so while there are no official promotions, you may be able to access promotional rates from various banks.

When your CD matures, the funds will be released into a settlement account, so there is no grace period.

Once the funds are in your settlement account, you can choose to withdraw the funds or reinvest into another CD.

The interest on Charles Schwab CDs is not compounded, since many products are designed to offer an income.

This means that you can have interest disbursement on a monthly, quarterly or annual basis depending on the CD term.

There is no early withdrawal penalty as such, since you can sell your CD on the secondary marketplace.

However, there are no guarantees that you will get your initial investment sum back, as the bids will depend on the current market conditions. You’ll receive notification of the highest bid and then you can decide if you wish to sell.

Compare CD Rates

Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann's areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
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