Certificates of Deposit FAQs

Find answers to common questions about how CDs work, interest rates, early withdrawals and what happens when your CD matures.

How does a certificate of deposit (CD) work?
A certificate of deposit (CD) is a deposit account that holds funds for a set term and earns interest. CDs may offer a different rate than traditional savings accounts, and withdrawing funds before maturity may result in an early withdrawal penalty.

What happens if I withdraw money from a First National Bank CD before maturity?
Withdrawing money from a CD before its maturity date may result in an early withdrawal penalty. The penalty can reduce the interest earned and may depend on the CD terms.

What do term, minimum balance and rate mean for a CD?
For a CD, the term is how long the funds remain on deposit, the minimum balance is the amount required to qualify for the stated CD rate, and the rate is the interest rate paid on the deposit.

What is the difference between an interest rate and APY?
An interest rate is the stated rate paid on a deposit, while annual percentage yield (APY) reflects the amount you may earn over one year when compounding is taken into account. APY can make it easier to compare deposit products with different compounding schedules.

What happens when a First National Bank CD matures?
When a First National Bank CD matures, there is a grace period during which you can withdraw or change the funds before the CD automatically renews. The renewal occurs for the same term at the standard rate if no action is taken during the grace period.