Fidelity CDs: Pros, Cons, and Current Rates (2024)

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Fidelity is an investment, retirement planning, and financial advisory firm with locations around the U.S. It offers a wide range of financial products, including CDs.

If you're considering buying CDs to boost your savings, Fidelity CDs may be a smart option. Here's what to know about Fidelity CD rates before making your decision.

Understanding Fidelity CD Options

Types of CDs Available Through Fidelity

Fidelity offers brokered CDs, meaning the company purchases its CDs from other financial institutions and resells them to the customer. This allows consumers to open CDs with several banks at once — all with one point of contact through Fidelity.

Brokered CDs typically have higher interest rates than traditional CDs do, though interest doesn't compound as it usually does with regular CDs. Brokered CDs also don't charge early withdrawal penalties, and you can sell your CD any time if you need cash before it matures.

How to Buy CDs on Fidelity

To open a CD with Fidelity, you'll need a brokerage account or retirement account with the company first. This is where your CDs will be held and your interest deposited upon maturity. You can also select an "auto-roll" option that lets you roll your money — plus the interest you earned on it — into a new brokered CD once an old one matures.

Fidelity CD Rates Today

Fidelity CD rates are significantly higher than the average CD rates, and some even rival or beat the highest CD rates on the market.

Fidelity's CD terms range from three months to twenty years and pay up to 5.30% APY (Annual Percentage Yield). Here's a look at how Fidelity CD rates break down by term:

CD TermAPY (Annual Percentage Yield)
3 months5.30%
6 months5.15%
9 months5.00%
1 year5.15%
18 months4.90%
2 years4.90%
3 years5.00%
4 years4.85%
5 years5.10%
10 years4.90%
20 years4.85%

What Influences Fidelity CD Earnings

Trying to figure out if it's the right time to get a brokered CD? We'll explain important factors that influence CD earnings so you can see if a Fidelity CD is a suitable option for you.

Call Risk in CD Earnings

Brokerage firms like Fidelity can offer callable CDs. These CDs can be called back by the financial institution before your account reaches maturity. If your CD is called back, you won't earn the total interest you would've received if the CD had fully matured.

Financial institutions usually call back an account when CD rates drop. If rates are steady or rising, callable CDs are less likely to get called back.

Fidelity Partner Banks

Fidelity has CDs issued by banks. Brokerage customers benefit from this because they can get competitive CD rates that are significantly higher than average CD rates.

Market Fluctuations and the Fed's Actions

The Fed's actions can also impact Fidelity CD rates. CD rates fluctuate when the Federal raises or lowers the federal funds rate. Paying attention to upcoming Fed meetings can help you gauge whether CD rates might change in the future.

Fidelity CD Pros and Cons

Fidelity CD Pros

  • High interest rates
  • Many term options
  • FDIC-insured
  • No early withdrawal penalties
  • You may sell your CDs at any time
  • Auto-roll feature lets you automatically invest in a new CD at maturity

Fidelity CD Cons

  • Interest does not compound
  • You must have an existing brokerage or retirement account with Fidelity
  • You may lose money if you sell your CD before maturity

Should You Invest in CDs Through Fidelity?

Fidelity CDs may be a good option if you're looking for brokered CDs with high interest rates. You must have a Fidelity brokerage account in order to get CDs.

Some of Fidelity's CD rates rival the best CD rates on the market — though like any brokered CD, they do not compound interest.

Fidelity CD Alternatives

Fidelity CDs vs. Synchrony Bank CDs

Synchrony Bank CD rates are 0.25% to 5.15% APY, which aren't as high as Fidelity rates — though they're traditional CDs, so interest compounds daily. Synchrony also offers more CD options than Fidelity. While there are no brokered CDs, there are bump-up CDs and no-penalty CDs, and terms range from three months to five years. Both Fidelity and Synchrony Bank CD rates are higher than national averages.

Synchrony Bank Review

Fidelity CDs vs. Capital One 360 CDs

Capital One 360 CD rates are high overall, but they're not quite as high as those offered by Fidelity. Capital One 360 CD rates are 3.90% to 5.00% APY. Capital One 360 CDs are traditional CDs with interest that compounds monthly.

Capital One 360 Review

Why You Should Trust Us: How We Reviewed Fidelity CDs

To review Fidelity CDs, we used Business Insider's certificate of deposit methodology. Our methodology considers interest rates, minimum deposit requirements, CD term variety, the company's overall ethics, mobile app quality, and customer service. We assign each category a rating on a scale of one to five, then average the scores together to reach an overall CD rating.

Note: We typically consider early withdrawal penalties, but we omitted this category when reviewing Fidelity CDs. As a general rule, brokered CDs do not carry early withdrawal penalties.

Fidelity CD Rates FAQs

Are Fidelity CDs legit?

Yes, Fidelity CDs are legitimate certificates of deposit. They allow you to earn a preestablished interest rate on a single deposit if held to maturity — anywhere from three months to twenty years.

Does Fidelity offer competitive CD rates?

Fidelity is a good choice for CDs, as its interest rates are much higher than the national average. Fidelity CDs are not a good choice if compounding interest is important to your savings strategy, though, as these are brokered CDs that offer only simple interest.

Do Fidelity CDs typically have fees?

It depends on the CD. If you're purchasing or selling a CD on the secondary market, there may be a $1 trading fee for CDs.

Are Fidelity CDs FDIC-insured?

Fidelity CDs are insured by the FDIC. All Fidelity CDs are bought through FDIC-insured banking institutions, so consumers are protected on up to $250,000 in deposits at each individual bank.

Do I need a Fidelity account to invest in CDs?

Yes, you must have a Fidelity brokerage account to invest in CDs. Brokered CDs are specifically for brokerage customers.

Aly J. Yale

Aly J. Yale is a writer and editor with more than 10 years of experience covering personal finance topics including mortgages and real estate. She contributes to Personal Finance Insider’s mortgages and loans coverage.ExperienceAly began her journalism career as reporter, and later an editor, for several neighborhood sections of the Dallas Morning News.Her work has been published in several national publications, including Bankrate, CBS, Forbes, Fortune, Money, Newsweek, US News and World Report, the Wall Street Journal, and Yahoo Finance. She’s also contributed to a variety of mortgage and real-estate publications, such as The Balance, Builder Magazine, Housingwire, MReport, and The Mortgage Reports.Her favorite personal finance tip is to schedule regular check-ins to make sure your credit cards, savings accounts, and other financial vehicles still align with your budget and financial goals. She is a member of the National Association of Real Estate Editors (NAREE).ExpertiseAly’s areas of personal finance expertise include:

  • Mortgages
  • Loans
  • Real estate
  • Insurance

EducationAly is a graduate of Texas Christian University, where she received a bachelor’s degree in radio/TV/film and news-editorial journalism.

Sophia Acevedo

Banking Editor

Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circumstances and overcoming their fears around money.ExpertiseSophia's expertise includes:

  • Bank accounts
  • Savings and CD rate trends
  • Budgeting
  • Saving
  • How banks operate

EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.

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Marketing Compliance Manager

Angela Fung is the Compliance Manager for Business Insider'sPersonal Financedivision, overseeing a team that ensures content accuracy and editorial independence so readers are always getting up-to-date and objective financial advice.The compliance team's mission is to maintain reader trust by confirming stories are fact-checked and current so that readers can make informed financial decisions. The team also works to minimize risk for partners by maintaining clear, precise language that is compliant with regulatory and partner marketing guidelines that align with the editorial team.

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Fidelity CDs: Pros, Cons, and Current Rates (4)

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Fidelity CDs: Pros, Cons, and Current Rates (2024)

FAQs

What are current CD rates at Fidelity? ›

Fidelity CD Rates Today
CD TermAPY (Annual Percentage Yield)
1 year5.15%
18 months4.90%
2 years4.90%
3 years5.00%
7 more rows

Are Fidelity CDs safe? ›

Brokered CDs offered by Fidelity are FDIC-insured up to $250,000 per account owner, per institution. However, there is a way to expand your coverage beyond this amount.

What are the advantages and disadvantages of brokered CDs? ›

Brokered CD Pros and Cons
ProsCons
Greater liquidity, since you can sell CDs on the secondary market without a penalty.Selling brokered CDs before maturity can be risky if they lose value.
Brokerages may offer greater variety for CD terms.Higher rates are not guaranteed.
2 more rows
Jul 19, 2024

Are brokered CDs as safe as bank CDs? ›

CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per individual at each bank. 1 Brokered CDs are technically not FDIC-insured. However, the broker's underlying CD purchase from the bank is insured.

What are the best brokered CD rates today? ›

Best CD Rates Today
InstitutionRate (APY)Early Withdrawal Penalty
Presidential Bank5.50%6 months of interest
Vibrant Credit Union5.50%All earned interest
INOVA Federal Credit Union5.40%3 months of interest
INOVA Federal Credit Union5.35%3 months of interest
11 more rows

Can you get 6% on a CD? ›

You can find 6% CD rates at a few financial institutions, but chances are those rates are only available on CDs with maturities of 12 months or less. Financial institutions offer high rates to compete for business, but they don't want to pay customers ultra-high rates over many years.

What happens to Fidelity CD when it matures? ›

The CDs will not be automatically renewed or rolled over and interest on the CDs will not continue to accrue or (in the case of zero-coupon CDs) accrete after maturity. At maturity the CD balances will be remitted by the Issuer to the Firm and credited to your account with the Firm.

Is it better to put money in a CD or money market? ›

CDs generally offer higher interest rates compared with money market accounts. Money market accounts provide access to funds and offer interest rates similar to regular savings accounts. CDs earn more interest over time but have restricted access to funds until maturity.

Do you pay taxes on CDs? ›

Interest earned on CDs is considered taxable income by the IRS, regardless of whether the money is received in cash or reinvested. Interest earned on CDs with terms longer than one year must be reported and taxed every year, even if the CD cannot be cashed in until maturity.

Why does my fidelity CD show a loss? ›

Like all fixed income securities, brokered CD prices are particularly susceptible to fluctuations in interest rates. If interest rates rise, the market price of outstanding brokered CDs will generally decline, creating a potential loss should you decide to sell them in the secondary market.

Can you lose principal on a brokered CD? ›

Brokered CDs come with certain risks.

For example, when interest rates are rising, you might lose money on a brokered CD if you sell it before the maturity date. However, brokered CDs are still safe in the sense that they're protected by a bank's FDIC insurance.

What is the biggest negative of putting your money in a CD? ›

Banks and credit unions often charge an early withdrawal penalty for taking funds from a CD ahead of its maturity date. This penalty can be a flat fee or a percentage of the interest earned. In some cases, it could even be all the interest earned, negating your efforts to use a CD for savings.

What happens to a brokered CD if the bank fails? ›

If the money you put into your brokered CD pushes your total deposits in an account ownership category at a bank over the $250,000 federal deposit insurance limit, you are at risk of having uninsured funds and may lose money if the insured bank fails.

Does Fidelity charge for CDs? ›

Fidelity does not charge a fee to purchase a new issue CD. However, if you choose to sell your CD on the secondary market, you will incur a $1 trading fee per $1,000 CD. Additional fees may apply if you trade via a Fidelity representative.

What happens when a brokered CD matures? ›

What happens when my brokered CD matures? Your principal and interest go into your settlement fund and become available as cash. The brokered CD will no longer appear in your accounts as a holding.

What is the current interest rate at Fidelity? ›

Current Interest Rates as of July 29, 2024
CD Rates$500 to $99,999.99
Interest RateAPY
10 Month4.93%5.00%
12 Month0.30%0.40%
15 Month4.69%4.75%
9 more rows

Who has the highest 12 month CD rate today? ›

Our picks for the best one-year CD rates are:
  • Synchrony Bank (4.80% APY)
  • Ally Bank (4.50% APY)
  • Marcus by Goldman Sachs (5.15% APY)
  • Quontic Bank (4.50% APY)
  • BMO Alto (5.05% APY)
Jul 22, 2024

What is the current CD rate on $100000? ›

Best Jumbo CD Rates for August 2024
BEST NATIONAL JUMBO CDs
Grow Financial Federal Credit Union4.86% APY$100,000
Luana Savings Bank4.38% APY$100,000
State Department Federal Credit Union4.37% APY$100,000
Best non-Jumbo option: BMO Alto4.75% APYAny amount
46 more rows

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