Certificates of Deposit (CDs)

A certificate of deposit (also referred to as a “CD”) is a special type of deposit account with a financial institution that typically offers a higher rate of interest than a regular savings account.  If you are investing in a CD, you should verify that you are purchasing the CD, or any type of “deposit” product, directly from a federally insured institution.  To confirm that a bank is FDIC-insured, please visit banks.data.fdic.gov/bankfind-suite/bankfind.  To confirm that a credit union has share/deposit insurance, please visit mapping.ncua.gov/ResearchCreditUnion.aspx.  Some brokerage firms or other entities that are not financial institutions may offer CDs that are not insured by the full faith and credit of the United States government through the FDIC or NCUA.

While deposit products can vary, most CDs have some common terms.  When you purchase the CD, you invest a fixed sum of money for a fixed period of time – this may be six months, one year, five years, or more.  In exchange, the issuing institution pays you interest, typically at regular intervals.  If you cash in your CD at the end of the fixed period (also called the “maturity date”), you typically receive the money you originally invested plus any accrued interest.  However, if you redeem your CD before it matures, you may have to pay an early withdrawal penalty or forfeit a portion of the interest you earned. 

Before you purchase a CD from your financial institution or brokerage firm, make sure you fully understand all of its terms.  Additionally, you should read all the terms, disclosures, and any fine print before you invest.

If you have a complaint about a CD you purchased, you should attempt to resolve the issue directly with the institution you purchased it from.  If you have an issue with a CD purchased from a bank, you can file a complaint directly with the bank’s primary federal regulator.  To determine which federal regulator has authority over the bank, visit the FDIC BankFind website linked above.   If you have a complaint about a CD you purchased through a credit union, you may wish to file a complaint with the NCUA at www.mycreditunion.gov/consumer-assistance-center/complaint-process.  If the bank or credit union is a state-chartered institution, you may wish to report the issue to the state regulator as well.  To report an issue with a Georgia-charted institution, please send detailed information to [email protected].

If you have a problem with a CD sold by an investment firm, you should similarly attempt to resolve the issue directly with the firm.  However, if you wish to submit a complaint about the CD or other investment product, you may consult with the Securities and Exchange Commission (“SEC”) by visiting www.sec.gov.  If you wish to file a complaint against a salesperson representing an investment firm, you may do so with the Financial Industry Regulatory Authority (“FINRA”).  You can learn more about the FINRA complaint process and other options offered by FINRA by visiting www.finra.org/investors/have-problem.  In addition, you may wish to file a report with the Georgia Secretary of State’s Office at https://sos.ga.gov/