Fidelity is best known as an investment platform, so you may be surprised that you can access CDs from this firm. In fact, Fidelity offers brokered CDs. These differ from traditional CDs as while they are issued by banks, they are only available to brokerage customers.
Fidelity CDs are available as new offerings and via a secondary market, but you can access products with different rates and terms.
Since these are a little different to traditional bank CDs, we’ll delve into these products in more detail to help you decide if Fidelity CDs could be a good option for you.
Fidelity CDs
APY Range
Minimum Deposit
Terms
Our Rating
Fidelity CDs
APY Range
Minimum Deposit
Terms
Our Rating
Fidelity CD Rates
Fidelity CDs are available with terms of three months up to 5 years, so you can lock in a rate according to your requirements and investment strategy. Generally, longer-term CDs offer higher yields, but there are some exceptions. Also, Fidelity offers excellent options for CD laddering.
All Fidelity CDs are FDIC insured, so you’ll have up to $250.000 of protection per account owner, per institution. It may also be able to increase this coverage, since Fidelity offers CDs from hundreds of banks and each will provide FDIC coverage up to the FDIC limits. So, you can expand your protection by combining different bank CDs.
CD Term | APY |
|---|---|
3 Months | 4.95% |
6 Months | 4.70% |
9 Months | 4.45% |
12 Months | 4.35% |
18 Months | 4.15% |
24 Months | 4.00% |
36 Months | 3.90% |
48 Months | 3.85% |
60 Months | 3.80% |
Overall, the Fidelity offers some of the best CD rates as of September 2024, but keep in mind the process of investing in brokered CDs is a bit different than how it works with your bank.
Brokered CD vs. Bank CD: How They Compare?
A brokered CD is a certificate of deposit (CD) that is purchased through a brokerage firm or other financial intermediary, while a bank CD is a CD that is purchased directly from a bank. While both brokered CDs and bank CDs are FDIC-insured up to $250,000 per account holder per bank, there are some differences between them.
One key difference is the availability of options. Brokered CDs often offer a wider range of CD options from various banks and credit unions, including CDs with higher interest rates and longer terms than what is typically available at a single bank. This can be beneficial for those who are looking for more customized CD options or higher yields.
Another important area to consider in how brokered CDs work is that, generally, there is a secondary market. This means that you may be able to liquidate your funds before the CD matures. However, you will incur a trading fee from Fidelity and the CDs are subject to a mark down, as newly issued CDs tend to garner more interest.
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Are Fidelity CD Rates Competitive Compared to Bank CDs?
Since Fidelity offers CDs from hundreds of different banks, the brokered CDs offer very favorable rates even when compared with online banks. It offers one of the highest rates for 6 months CDs as well as 3-month CD rates.
Online banks are a little different since they don’t have to cover the costs of maintaining a physical branch network. This means that they typically offer the most attractive rates. Since Fidelity offers CDs from hundreds of different banks, the brokered CDs offer very favorable rates even when compared with online banks.
The current average Fidelity CD rates are several times higher than the national average, making them highly competitive. However, there are some costs which may offset these higher rates.
New issue CDs have a minimum deposit requirement of $1,000 and they are issued in $1,000 increments, which differs from traditional CDs, which usually allow you to deposit any amount over the minimum requirement. There are no brokerage fees for new issues, but if you purchase a Fidelity CD on the secondary market, a trading fee applies.
CD APY Range | Minimum Deposit | |
|---|---|---|
Marcus | 3.90% – 4.80% | $500 |
First Internet Bank | 4.14% – 4.94% | $1,000 |
Barclays Bank | 0.10% – 5.10% | $0 |
PNC Bank | 4.75% | $1 |
Quontic Bank | 3.50% – 5.10% | $500 |
PenFed Credit Union | 2.00% – 4.35% | $1,000 |
Alliant Credit Union | 4.80 % – 4.70 % | $1,000 |
Sallie Mae | 4.75% – 4.90% | $2,500 |
Bread Financial | 4.25% – 4.75% | $1,500 |
Capital One | 3.90% – 4.50% | $0 |
Chase Bank | 3.25% – 4.75% | $1,000 |
Discover Bank | 2.00% – 5.10% | $2,500 |
CIT Bank | 0.30% – 3.50% | $1,000 |
Ally Bank | 3.75% – 4.90% | $0 |
Citi Bank | 0.05% – 4.51% | $500 |
Connexus Credit Union | 3.51% – 4.85% | $5,000 |
Merrick Bank | 3.90% – 5.04% | $25,000 |
Fidelity | 3.85% – 4.95% | $1,000 |
Charles Schwab | 5.04% – 4.15% | $1,000 |
Vanguard | 3.70% – 5.00% | $1,000 |
BMO Harris | 0.05% – 4.50% | $1,000 |
Wells Fargo | 4.25%- 4.50% | $2,500 |
Synchrony Bank | UP TO 4.85 % | $0 |
Citizen Bank | 2.75% – 5.25% | $1,000 |
TD Bank | 1.00% – 5.00% | $250 |
Navy Federal | 4.85% | $1,000 |
LendingClub | 4.00% – 5.20% | $2,500 |
Fidelity CD Rates vs Fidelity Savings
Currently, Fidelity does not offer savings accounts, so you must compare the Fidelity CD rates with saving account options at online and traditional banks in your area. You are likely to find that Fidelity CDs offer a higher APY, but there are reasons for this.
Firstly, savings accounts allow you to deposit and withdraw funds as and when you like, with the exception of high-yield savings accounts, which limit the number of withdrawals you can make per month. This means that you’re not locked into a specific term. However, the downside of this is that the rates are subject to change.
While a CD allows you to lock in an attractive rate for the entire term, saving account rates are subject to change. So, when the base rate drops, you’re likely to find that your savings account APY will quickly follow the trend.
About Fidelity
Fidelity has a history dating back over 75 years, as it was established in 1946 and it continues to be managed by the family of founder Edward Johnson II, who retained 49% ownership of the company. Fidelity claims to have helped over 40 million people work towards their financial goals and aim to offer innovative investment solutions to help personal customers and business owners.
Today, you can use Fidelity to access a variety of investment products including brokered CDs, bonds, ETFs, and funds, so you can incorporate brokered CDs into your overall investment strategy.
FAQs
Does Fidelity Offer No Penalty CD Rates?
Fidelity offers brokered CDs, which means that you can liquidate without incurring the early withdrawal fee, you may incur with a traditional bank CD.
However, you will be selling your CD on a secondary market, so you’ll incur a trading fee and there are no guarantees of a settlement cost, since new issue CDs tend to have a higher demand.
Does Fidelity offer promotions on CDs?
Fidelity provides access to CDs from hundreds of banks, so there are no advertised promotions, but you should be able to access some of the best deals in the marketplace.
Do Fidelity CDs come with a grace period?
No, the Fidelity CDs do not auto renew. Upon maturity, the funds will be released into your settlement account. You can then choose to withdraw or reinvest the funds as you prefer.
How is Fidelity CDs interest calculated?
Typically, the interest on Fidelity CDs is not compounded. If you have a short term CD, it will be added to your account upon maturity. Longer term CDs may offer interest payments on a monthly, quarterly or annual basis.
How does the Fidelity early withdrawal penalty work?
There is no early withdrawal penalty as such. Instead you need to arrange for your CD to be sold on the secondary market.
Fidelity will aim to broker a sale for you, but the amount you receive will depend on the current market and demand. You’ll also incur a trading fee for use of the secondary market.
How We Rate Certificates of Deposits: Our Methodology
The Smart Investor team has thoroughly examined certificate of deposit (CD) offerings from various banks, considering multiple factors to provide a comprehensive evaluation. Here's how we rated them across four key categories:
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CD Rates (50%): We meticulously analyzed the interest rates offered by each bank on their certificate of deposit (CD) products. Higher ratings were awarded to banks offering competitive rates that provide maximum returns for customers' investments. Factors such as the yield curve, current market conditions, and consistency of rates were considered to assess the attractiveness of each bank's CD rates.
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CD Features (30%): This category evaluated the features associated with each bank's certificate of deposit offerings. Factors considered include the variety of terms available, early withdrawal penalties, minimum deposit requirements, and any additional features or benefits. Higher ratings were given to banks offering a diverse range of CD terms, reasonable early withdrawal fees, and flexible options to meet customers' investment needs.
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Customer Experience (10%): A positive customer experience is paramount, even when investing in CDs. We assessed each bank's performance in this area, considering factors such as the ease of opening a CD account, the responsiveness of customer service, and overall user satisfaction. Higher ratings were assigned to banks with efficient account opening processes, helpful customer support, and a track record of satisfying customers.
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Bank Reputation (10%): The reputation of a bank is a critical consideration when investing in CDs. We evaluated each bank's reputation based on factors such as financial stability, regulatory compliance, and public perception. Higher ratings were given to banks with a solid reputation for reliability and trustworthiness, ensuring customers' investments are safe and secure.
By considering these categories and assigning appropriate weights to each, our review aims to provide valuable insights to help individuals make informed decisions when investing in certificate of deposits.
