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Open a Certificate of Deposit Account in 3 Simple Steps

Apply for a Certificate of Deposit (CD) Account. You'll need to provide some basic personal information to start the process of opening of your account. (If you prefer, you can also stop by any of our locations to open an account.)

                   Apply Online    Need Assistance or Have Questions

We Will Contact You. One of our Relationship Bankers will contact you to assist in opening your account. You'll be asked to pick a type of CD and choose your term. Compare CD terms and rates. If you're not an existing customer, opening an account will require a copy of your driver's license and social security number (or other taxpayer ID), which can be submitted electronically.  

Deposit Your Funds & Start Earning. Each CD type requires a different minimum amount to open your account. You can transfer the funds with an internal electronic transfer, mail in a check, stop by the bank, or wire the funds. Now You're Done! 

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Learn More About Certificates of Deposit. 

• • How Do Certificates of Deposit Work?

  • Some of the confusion surrounding CDs may just be semantics. Simply put, a CD is a savings account with a fixed interest rate and maturity date. CDs typically offer better rates of return than traditional savings accounts, but impose penalties if you withdraw money early. 

    Both CDs and savings accounts are opened with a bank deposit, but the minimum deposit for CDs is generally larger. And while you can continually make deposits - and should - into your savings account, you can't add to your CD. That's why it's important to determine on the front-end how much you can afford to set aside in a CD. 

    The duration of CDs and interest rates - known as the annual percentage yield or APY - vary, with terms ranging from just three months to as much as 10 years. Usually, the longer the term, the higher the rate. 

  • What Happens if I Need Access to My Funds Before the CD Term Expires?

  • 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.

  • What Does "Term," "Minimum Balance," and "Rate" Mean?

  • When you are purchasing a Certificate of Deposit (CD) you will be offered several choices and you can select the CD option that best fits your financial needs. These are common terms associated with the different options.  

    • Time Deposit (also known as a term deposit): Time deposit is a money deposit at a bank that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn, or can be held for another term. The longer the term, the better yield on the money. Generally, there are significant penalties for early withdrawal. 
    • Minimum Balance: The amount of money required to be on deposit in an account to qualify the depositor for the interest rate on their CD. 
    • Rate: The interest rate you will earn on your CD varies according to the term and how much money you have deposited. 

  • What's the Difference Between Compound Interest and 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.  

  • 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. 

  • What are the Penalties for Withdrawing Money Early from a Certificate of Deposit (CD)?

  • It depends on the terms of your account. Federal law sets a minimum penalty on early withdrawals from CDs, but there is no maximum penalty. If you withdraw money within the first six days after deposit, the penalty is at least seven days' simple interest. Review your account agreement for policies specific to the bank and your account.

    Refer to 12 CFR 1030 "Truth in Savings Act (Regulation DD)."

  • Does the Bank Have to Continue to Pay Interest on My CD After it Matures?

  • Not necessarily. If you choose to roll over/renew the CD for another term, the bank will pay interest according to the roll over or renewal terms of your account agreement.

    Let's say you haven't decided in advance. Once the CD matures, you may have a grace period, established by the bank, to decide whether to renew the CD or withdraw the funds. The bank will pay interest, if any, once the CD matures in accordance with your account agreement and bank policy during the grace period.

    You should review your account agreement, which explains if interest is paid after maturity. You should have received this agreement when you opened the account.

  • I Cashed My CD Before it Matured, and the Bank Charged Me an Early Withdrawal Penalty. Can They Do This?

  • Yes. CDs are not intended to be liquid (that is, able to be converted into cash easily at any time). When you buy a CD you enter into a contract involving a fixed amount of money (principal) for a predetermined period of time (the term) and an agreed-upon interest rate and yield.

    Banks are required by law to assess an early withdrawal penalty whenever funds from a CD are withdrawn prior to the date of maturity. Read your account agreement for information about the bank's policies and fees.

  • What is a Good CD Rate?

  • Certificate of deposit rates are changing all the time and depend largely on the financial institution, length and amount of deposit and federal funds rate set by the U.S. Federal Reserve. When the Fed raises rates, banks offer higher APYs on CDs—and vice versa.

    First National Bank offers attractive and competitive interest rates on CDs from 3 months to 5 years. Contact us today to learn more about diversifying your portfolio with certificates of deposit and take advantage of these practical investment savings tool.