Fidelity CD Rates: How They Compare

Fidelity’s certificates of deposit differ from traditional bank CDs since they’re brokered CDs, which are CDs issued by banks but available only to brokerage customers. Fidelity offers new-issue CDs from various banks as well as CDs sold by other investors on a secondary market.

Unlike bank CDs, brokered CD rates (before purchase) can fluctuate daily and differ from those found directly through banks and credit unions.

» Learn more about brokered CDs

Fidelity CD rates

Fidelity has at least nine terms for new-issue CDs. The following are the top CD rates available in Fidelity's marketplace for each term*:

*Note: Rates are subject to daily fluctuations. Check Fidelity’s website for the most current rates.

» Want more options? See the best CD rates at banks and credit unions

How Fidelity CDs work

Getting brokered CDs is a more complex process than opening bank CDs.

Investment portfolio required. You must have a brokerage account, either a taxable or individual retirement account, to hold your Fidelity CDs.

Minimum per CD: Fidelity offers two different minimums: $100 and $1,000. New-issue “whole” CDs start at $1,000 and are typically issued in increments of $1,000. Fidelity also offers fractional CDs, meaning you can invest in CDs with a minimum of $100 and in increments of that amount. Unlike regular bank CDs, which may hold various amounts of money, Fidelity breaks its CDs up into smaller, typically standardized amounts. For example, buying $20,000 in CDs technically means you’re buying 20 whole CDs of $1,000 each (or 200 fractional CDs of $100 each).

Rates are banks’ decisions: Banks where the CDs originate can choose to have higher or lower rates for their Fidelity CDs than what they offer directly to their own customers.

Types of CDs: Here are several that Fidelity offers:

• Regular CDs: You receive interest until the term ends, or you can decide to sell before then. The CD can have a fixed rate, as most bank CDs do, or have a variable rate, meaning the rate may change during the term.

• Callable CDs: These tend to have a slightly better rate than regular CDs, but have an important caveat. The bank issuing them can “call” or cancel the CD before the term ends. This means you would receive interest only for the time you had the CD, as well as getting your initial CD deposit back.

• Zero-coupon CDs: These don’t earn interest, so you make money by buying a CD at a discount and then receiving the full value at maturity. The minimum value per CD is $1,000, so you’d buy the CD for less than that.

• Step-up (or step-rate) CDs: These CDs have a predetermined schedule for rate increases and are usually callable, so you might not see the rate increase before the CD gets called. (Banks also offer step-up CDs directly.)

• Whole vs. fractional CDs: Fidelity CDs can only be bought in increments and it defines a whole CD as having a $1,000 increment. A fractional CD has a minimum increment and minimum deposit of $100. One caveat if you’re going for smaller increments or minimums: Fidelity states that higher yields may be available on whole CDs.

The type of CD depends on the issuing bank, which you can see in Fidelity’s marketplace.

More details about Fidelity CDs

» Learn more about accounts on our Fidelity review

What else to know when buying Fidelity CDs

Some pros:

• Fidelity can federally insure beyond a bank’s limits. Federal deposit insurance at a bank can cover only up to $250,000 per account type per customer. Since Fidelity lets you buy CDs from many banks, you can expand your protection against the possibility of a bank failing.

• Range of terms is wider than you can find at most banks. Fidelity offers flexibility for short- and long-term CDs and CD ladders, with rare 10-year and 20-year terms (when available).

Some cons:

• Top rates available today may fluctuate. Since the CDs are not Fidelity's, it doesn’t control what rates show up in its marketplace. There’s no guarantee you’ll find the same top rates in the morning and evening on the same day. But once you buy a CD, you lock in that rate.

• Some investing knowledge required. A new investor might come across unfamiliar terms on Fidelity’s platform. For example, “coupon” refers to interest rate and “call protection” means a CD is not callable.

» Need more access to funds? See the best high-yield savings accounts instead

Brokered CDs have risks and rewards

As a brokerage, Fidelity can offer more CD options than one bank can. This could be helpful to investors who have a lump of cash suitable for CDs, but potentially overwhelming if you’re unfamiliar with investing. If you want to see more CD options, check out our list of best CD rates this month. For more about Fidelity as a broker, see our review.