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Fidelity sells brokered CDs, which work similarly to regular CDs but differ in how they’re opened, closed and insured. Customers can choose from nine terms for new CDs and six terms for fractional CDs or purchase CDs sold by other investors through Fidelity’s secondary market. New CDs require a minimum deposit of $100 or $1,000.
Fidelity Certificates of Deposits are competitive with top banks. New issue CD rates are listed below. Secondary CD rates, terms and minimum deposit requirements vary depending on availability and market conditions. Annual percentage yields (APYs) and account details are accurate as of June 3, 2024.
New Issue CDs
| CD Term | APY | Minimum Deposit |
|---|---|---|
3 Months | 5.40% | $1,000 |
6 Months | 5.40% | $1,000 |
9 Months | 5.40% | $1,000 |
12 Months | 5.35% | $1,000 |
18 Months | 5.20% | $1,000 |
24 Months | 5.05% | $1,000 |
36 Months | 4.85% | $1,000 |
48 Months | N/A | $1,000 |
60 Months | 4.45% | $1,000 |
Fractional CDs
| CD Term | APY | Minimum Deposit |
|---|---|---|
6 Months | 5.35% | $100 |
9 Months | N/A | $100 |
18 Months | 5.10% | $100 |
24 Months | 5.05% | $100 |
Overview of Fidelity CDs
Fidelity issues brokered CDs, which are investment products rather than deposit accounts. These CDs are sold by traditional banks to brokerage firms before being sold to investors.
New-issue Fidelity CDs are available in terms ranging from three months to five years, with a minimum opening deposit requirement of $1,000 for most CDs. Fidelity offers some new-issue fractional CDs with minimum opening deposit requirements of $100 and terms ranging from three to 24 months.
Secondary CDs are sold by other investors on Fidelity’s secondary market and may be priced at, below or above face value. Minimums and term lengths vary.
Fidelity does not permit early withdrawal, but you can try to sell your CD on the secondary market. There is no guarantee it will sell, and there’s a chance you will receive less than the expected value, but you might also profit depending on the rate environment and market conditions. Fidelity will also mark the price of your CD down when listing it for sale and charge a $1 trading fee.
Fidelity CD interest is paid monthly, quarterly, semi-annually or at maturity according to the terms of the issuing bank. Brokered CDs earn simple interest rather than compound interest.
Fidelity CD deposits are sold in increments and held with multiple insured institutions rather than just one, which allows the brokerage to offer FDIC coverage beyond the permitted $250,000 limit. Because FDIC coverage is assessed per depositor, per issuer, each participating bank offers coverage up to the maximum—which means higher limits for individual consumers. Only the principal and accrued interest are eligible for FDIC insurance, so any premium paid above face value is not covered.
| Overview of Fidelity CDs | |
|---|---|
Minimum Deposit | $100 |
Term Lengths | 3-60 months |
Compounding Schedule | N/A |
Early Withdrawal Penalty | N/A |
Grace Period for Penalty-Free Withdrawals After Maturity | N/A |
How Do Fidelity CDs Work?
Rather than offering its own traditional CDs, Fidelity sells brokered CDs, which are a type of investment product. Banks sell these CDs to brokerage firms—like Fidelity—which then resell them in set increments to customers looking to invest.
If you’d like to invest in a CD through Fidelity, you can choose either a new-issue or a secondary CD. New-issue CDs are initial sales priced at par value, typically in increments of $1,000, while secondary CDs are on the resale market and might be priced above or below that amount depending on market conditions.
If you want to invest more than $1,000, you can purchase multiple CDs. If you’d like to invest less, the institution also sells fractional CDs starting at $100.
For new-issue CDs, rates and terms are similar to traditional CDs at other banking institutions. You can choose a term between three months and five years, with varying interest rates. Your interest payment terms are set by the bank issuing the CD, which means you could be paid out monthly, quarterly or at maturity. You should also keep in mind that if you purchase many CDs, you may have several issuing banks, and terms may vary.
Interest earned on Fidelity brokered CDs is simple interest rather than compound interest, meaning you only earn interest on the principal invested, not on additional interest accrued. This means you can know exactly what you will earn over the term of your CD, provided you do not opt to resell on the secondary market.
If you do choose to resell your CD, you may do so through Fidelity for a $1 trading fee. Depending on current market conditions, you could make more or less than the account’s par value.
How Much Can You Earn With Fidelity’s CD Rates?
The rate you’ll earn on your Fidelity CD depends on several factors, including your term length and the amount you deposit. Brokered CDs do not earn compound interest automatically since interest earnings are credited directly to your brokerage account, so you would need to move earnings to another certificate yourself if you want them to compound.
Use the CD calculator below to estimate your return. Actual earnings may differ.
How Fidelity CDs Compare
Fidelity’s CD rates are competitive when compared to the best CD rates currently available and much higher than the national average rates for CDs, according to the FDIC. For example, Fidelity six-month CDs earn 5.40% APY, while the national average for this term is 1.79% as of May 2024. Still, you might be able to earn a more favorable APY on the term you need with another institution. Research your options carefully before deciding.
As brokered CDs, Fidelity CDs offer additional benefits that might make them the better choice for you, such as the ability to sell them early. Fidelity might also be a good fit for those interested in browsing secondary CDs and those looking to deposit as little as $100. However, opening a brokered CD can be more involved than opening a bank CD, as you’ll need to have a brokerage account.
How To Open a Fidelity CD Account
If you’re interested in opening a CD with Fidelity, you’ll first need to set up a brokerage account with the institution. The funds available in this account will be used to make your CD purchases.
You can search all available new issue CDs by their issuing bank on Fidelity’s website, easily comparing term length, interest rates and payment schedules. After selecting the option that works best for you, including the amount you want to invest and if you want to allow Fidelity to automatically reinvest your balance upon maturity, you can complete your entire purchase online.
If you’d like to purchase multiple CDs of varying term lengths to diversify your investment, Fidelity also offers the opportunity to build CD ladders. You can choose from model ladders between one and five years in length—combining four to five CDs—or build your own ladder by selecting multiple CD products for your purchase.
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About Fidelity
Fidelity Investments is a brokerage firm offering a wide variety of products and services, from investment accounts to advisory services. Fidelity serves over 43 million investors and has around $11.5 trillion in assets under management. The firm operates over 200 Investor Centers across the U.S.
Frequently Asked Questions (FAQs)
Are Fidelity CDs FDIC-insured?
Fidelity CDs are FDIC insured up to $250,000 per account owner, per institution. Since Fidelity offers brokered CDs issued by multiple different insured institutions, each Fidelity CD may be eligible for extended insurance coverage beyond what a single CD with one bank could offer.
What are the CD rates at Fidelity?
Interest rates for new issue Fidelity CDs range from 4.45% to 5.40% APY, depending on term length, which currently ranges from three months to five years. Fidelity brokered CDs pay simple interest.
Does Fidelity have IRA CDs?
Fidelity does not offer IRA CDs in particular, though you do have the option to invest your IRA funds in a CD through the institution. Depending on the IRA you choose, you can opt to have Fidelity help manage your investment portfolio or choose investments on your own.
Does Fidelity charge fees 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.
Does Fidelity have good CD rates?
Yes, compared to other CD rates currently available, Fidelity CDs offer earnings that are competitive. Just remember that your yield and rates vary depending on the term length you purchase.
