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Certificate of Deposit (CD)

A certificate of deposit is a type of savings account with a fixed time period and interest rate. Consider a CD if you want a guaranteed return without much risk and want to have a safe place for savings earmarked for future use. Your funds are held at the bank and are federally insured up to $250,000 per account by the FDIC. 

CDs differ from traditional savings accounts in several ways: 

  1. CDs tend to have higher rates than regular savings accounts. 
  2. Savings account rates change over time, CD rates stay fixed once you open a CD. 
  3. Savings accounts give regular access to your money, CDs do not without a penalty. A savings account is a better option if you might need your money in a pinch, including your emergency fund.
  4. A saving account is better suited when you want to build up your savings.

Current CD Interest Rates


How CDs Work

Earning interestIn exchange for depositing your money into the bank for a fixed period (called the term or duration), First National Bank pays a fixed interest rate that is typically higher than the rates offered on savings accounts. When the term is up (or when the CD matures), you get back the money you deposited (the principal), plus any interest that has accrued. 

If you need to access your funds before the CD's term ends, you are subject to an early withdrawal penalty, which can significantly reduce the interest you earned on the CD. 


Terms, Minimum Balances, and Rates

CDs come in varying terms and may require different minimum balances. The rate you earn varies by the term and how much money is in the account. Typically, the longer the term and the more money you deposit, the higher the rate you are offered. 


Compound Interest versus Annual Percentage Yield (APY)

Like savings accounts, CDs earn compound interest - meaning that quarterly, the interest you earn is added to your principal. Then that new total amount earns interest on its own, and so on. 

It's important to understand the difference between interest rate and annual percentage yield (APY). The interest rate represents the fixed interest rate you receive, while APY refers to the amount you earn in one year, taking compound interest into account.  


Select and Open a CD

Relationship BankerWhat CD term should I get? When choosing a CD term, consider when you will need the money. If you need it soon, consider a shorter-term CD. If you're saving for something five years in the future, a CD with a longer term and higher rate may be more beneficial. 

The process for opening a CD starts the same way as for other bank accounts. Stop by any of our locations and a Relationship Banker will be able to assist you. 

View our Current Interest Rates and stop by one of our branches to purchase a CD today.

If you have questions, Contact Us. 

Contact Us


What Happens When a CD Matures? 

When a CD matures, or expires, there's a grace period of about a week in which you can withdrawal funds. After that period, your CD will automatically renew for the same term it had previously, and withdrawals before the next maturity date are subject to penalty. 

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