Schwab’s CDs are brokered CDs, purchased through your Schwab brokerage account from FDIC-insured bank issuers. We do not list current rates because we could not confirm them from Schwab; log in to schwab.com to see what active issuers offer. Unlike a bank CD opened directly at a bank, a brokered CD can give FDIC coverage across multiple banks and an exit through the secondary market rather than a fixed early withdrawal penalty, and it has differences worth understanding before you invest.
How Schwab CD Rates Work
Schwab does not issue CDs itself. Instead, Schwab’s Fixed Income marketplace aggregates CD offerings from dozens of FDIC-insured banks. When you buy a CD through Schwab:
- You select from available new-issue CDs by term, rate, and issuing bank
- Schwab purchases the CD on your behalf and holds it in your brokerage account
- Interest is paid to your Schwab account (monthly, quarterly, or at maturity depending on the issuer)
- At maturity, principal is returned to your Schwab account — brokered CDs typically do not auto-renew
Brokered CD vs. Direct Bank CD
| Schwab Brokered CD | Direct Bank CD (e.g., Ally) | |
|---|---|---|
| FDIC coverage | Per issuing bank (up to $250K each) | Per bank ($250K total) |
| Early exit | Sell on secondary market (variable price) | Early withdrawal penalty (fixed days of interest) |
| Auto-renewal | Usually no | Usually yes (with grace period) |
| Minimum | Varies by issuer (often $1,000) | Often $0–$2,500 |
| Multiple issuers | Yes — one account | No — one bank per account |
| Best for | Larger balances, investors already at Schwab | Savers wanting simplicity and predictable exit cost |
FDIC Coverage Stacking — A Key Advantage
One of the strongest reasons to use brokered CDs is the ability to maintain full FDIC coverage on amounts exceeding $250,000. Through Schwab, you can hold CDs from 10 different issuing banks — each insured up to $250,000 — giving you up to $2.5 million in FDIC coverage from a single brokerage account.
For anyone with significant liquid savings or proceeds from a home sale, business exit, or inheritance, brokered CDs offer a way to earn competitive rates while staying within FDIC limits across the entire balance.
Secondary Market — How to Exit Early
If you need funds before a brokered CD matures, you can sell it on Schwab’s secondary market. The sale price depends on current interest rates relative to your CD’s coupon rate:
- Rates have risen since purchase: Your CD’s fixed rate looks less attractive. You’ll sell at a discount — meaning you may receive less than face value
- Rates have fallen since purchase: Your CD’s rate looks relatively attractive. You may sell at a premium — receiving more than face value
This is fundamentally different from a bank CD’s fixed early withdrawal penalty. The secondary market outcome is unpredictable — you could gain or lose principal. For money you might need before maturity, a bank CD with a known penalty (or Ally’s no-penalty CD) is more predictable.
Who Should Use Schwab CDs?
Best for:
- Existing Schwab brokerage or investing clients who want to keep savings in one account
- Investors with larger balances who need to stack FDIC coverage across multiple issuers
- People comfortable with the brokered CD structure and secondary market mechanics
- Savers who prefer to shop multiple bank CD rates in one marketplace
Consider direct bank CDs if:
- You want simplicity and automatic renewal
- Your balance is under $250,000 (no FDIC stacking advantage)
- You want a no-penalty option (Ally)
- You prefer a predictable exit cost
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The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy