There are 10 distinct types of certificates of deposit, each with different features, trade-offs, and best-use cases. Traditional CDs offer the highest rates; no-penalty CDs offer flexibility; specialty types like brokered or IRA CDs serve specific situations.
This guide covers all 10 types with a head-to-head comparison table.
For current rates across all CD types, see the CD Guide 2026 and best CD rates 2026.
Quick Comparison: All CD Types at a Glance
| CD Type | Minimum Deposit | Penalty for Early Exit | Rate vs. Standard | Best For |
|---|---|---|---|---|
| Traditional | $0–$2,500 | Yes (3–18 months interest) | — (baseline) | Fixed savings goal |
| No-penalty | $0–$1,000 | No (after ~7 days) | 0.10–0.40% lower | Uncertain timeline |
| Bump-up | $500–$1,000 | Yes | 0.10–0.30% lower | Rising rate environments |
| Step-up | $500–$1,000 | Yes | 0.10–0.30% lower | Automatic rate increases |
| Callable | Varies | Bank can call early | 0.25–0.75% higher | Higher rate with reinvestment risk |
| Add-on | $500–$1,000 | Yes | Comparable | Building savings over time |
| Jumbo | $100,000 | Yes | 0.05–0.20% higher | Large balance holders |
| Zero-coupon | Varies | Yes | Equivalent at maturity | Long-term lump sum goals |
| Brokered | Varies | None (sell on market) | Comparable | Brokerage account holders |
| IRA CD | Varies | Yes + IRA rules | Comparable | Retirement savers |
| Share certificate | $500–$1,000 | Yes | Comparable | Credit union members |
1. Traditional CD
The standard certificate of deposit. You deposit a fixed amount for a fixed term (3 months to 5 years) and receive a guaranteed interest rate. No additions or withdrawals are permitted during the term.
Best for: Savers with a specific future goal and a date attached — down payment, tuition payment, renovation fund.
Key detail: Early withdrawal triggers a penalty of 3–18 months of interest depending on term and bank. See CD early withdrawal penalties for a breakdown by bank.
For full mechanics, see how do CDs work?
2. No-Penalty CD (Liquid CD)
A no-penalty CD functions like a traditional CD but lets you withdraw your full balance — principal plus earned interest — before maturity without paying an early withdrawal fee. Most no-penalty CDs require a minimum holding period of 6–7 days before you can withdraw.
Trade-off: Rates are typically 0.10–0.40% APY lower than traditional CDs of the same term.
Best for: Savers who want the rate stability of a CD but may need funds before maturity — or those building an emergency fund who want to earn more than a HYSA while preserving access.
See no-penalty CD rates 2026 for current top rates.
3. Bump-Up CD (Rate-Increase CD)
A bump-up CD lets you request one rate increase during the term if your bank’s CD rate rises above your locked rate. The bank is not required to match any specific rate — you can only request the bank’s current offered rate for the same term.
Trade-off: Starting rate is 0.10–0.30% lower than a comparable traditional CD.
Best for: Savers who believe rates may rise during their term and want one chance to capture a higher rate without fully breaking the CD.
4. Step-Up CD
Similar to a bump-up CD, but rate increases are automatic and predetermined at intervals (e.g., rate rises 0.25% every 12 months of a 3-year term). You do not need to request the increase.
Trade-off: Starting rate is lower than a traditional CD; overall rate may underperform if you could have simply opened a new CD at maturity.
Best for: Savers who want automatic rate increases without actively monitoring and requesting them.
5. Callable CD
A callable CD offers a higher initial rate in exchange for giving the bank the right to redeem the CD early — typically after a call protection period (e.g., 6 months). If the bank calls the CD, they return your principal plus any interest earned to that point.
Trade-off: Banks typically call CDs when rates fall — meaning you receive your money back precisely when reinvestment rates are lower. The higher starting rate compensates for this reinvestment risk.
Best for: Investors who understand the call risk and want a premium rate over a traditional CD.
See callable CD 2026 for full details.
6. Add-On CD
An add-on CD allows you to make additional deposits during the term after opening — unlike a standard CD, which closes to new deposits immediately. Balances grow with each additional contribution, all earning the same fixed rate.
Trade-off: Rarer than traditional CDs; fewer banks offer them, and starting rates are sometimes slightly lower.
Best for: Savers who want to build a CD balance over time rather than depositing a lump sum upfront — useful for goal-based saving (vacation fund, car fund).
7. Jumbo CD
A jumbo CD requires a minimum deposit of $100,000 or more. They were historically offered at a premium rate, but many online banks now offer comparable or even higher rates on standard CDs with no minimum.
Before assuming jumbo = better: Compare the jumbo CD rate at your bank against standard CD rates at competitive online banks. A jumbo CD at a traditional bank at 1.50% APY is worse than a standard online bank CD at 4.50% APY.
Best for: High-balance savers who already bank at an institution where the jumbo rate genuinely exceeds standard and online alternatives.
8. Zero-Coupon CD
A zero-coupon CD is purchased at a deep discount to face value and pays no periodic interest — all interest accrues and is paid as a lump sum at maturity. For example, you might pay $7,441 today for a CD that returns $10,000 in 5 years (implying ~6% annual growth compounded).
Tax consideration: The IRS requires you to pay income tax on the imputed interest each year even though you have not received any cash — this is called “phantom income.” Zero-coupon CDs are therefore best held inside a tax-advantaged account (IRA).
Best for: Retirement accounts where a specific future lump sum is the goal and annual tax on imputed interest is avoided.
9. Brokered CD
A brokered CD is a bank-issued CD sold through a brokerage platform (Fidelity, Schwab, Vanguard, TD Ameritrade). Key differences from bank-direct CDs:
- Liquidity: You can sell on the secondary market before maturity without the bank’s early withdrawal penalty — but the price may be above or below face value depending on current interest rates
- Rate: Slightly lower than direct bank CDs in some cases; competitive in others
- FDIC insurance: Each underlying bank’s CDs are FDIC-insured up to $250,000 — but you must track which banks you’re exposed to
- Callable risk: Many brokered CDs are callable — read the prospectus carefully
The SEC has published guidance on brokered CDs covering key risks.
Best for: Investors who want CD-like safety inside a brokerage account and want secondary-market liquidity.
10. IRA CD
An IRA CD is a traditional or no-penalty CD held inside an IRA (Individual Retirement Account). The CD itself works identically — fixed term, fixed rate — but benefits from IRA tax treatment:
- Traditional IRA CD: Contributions may be tax-deductible; interest grows tax-deferred; withdrawals taxed as ordinary income
- Roth IRA CD: Contributions are after-tax; interest grows tax-free; qualified withdrawals are tax-free
Early IRA CD withdrawals before age 59½ trigger both the bank’s early withdrawal penalty and the IRS’s 10% early distribution penalty.
IRA CDs receive a separate $250,000 FDIC coverage category from your personal deposit accounts at the same bank.
See IRA vs CD 2026 for the full comparison.
11. Share Certificate (Credit Union)
A share certificate is the credit union equivalent of a CD — same fixed term, fixed dividend rate, and early withdrawal penalties. The only meaningful difference is the insurer: share certificates are covered by NCUA insurance (up to $250,000) rather than FDIC.
Competitive credit unions often match or exceed online bank CD rates. See what is a share certificate?
Which CD Type Is Right for You?
| Your Situation | Recommended CD Type |
|---|---|
| Specific savings goal, fixed date | Traditional CD |
| Might need money early | No-penalty CD |
| Think rates will rise | Bump-up CD |
| $100,000+ and bank offers premium | Jumbo CD |
| Want CD inside retirement account | IRA CD |
| Already use a brokerage | Brokered CD |
| Credit union member | Share certificate |
| Long-term retirement lump sum | Zero-coupon CD (in IRA) |
Related Guides
- CD Guide 2026 — full hub with rates, calculators, and strategy
- What Is a Certificate of Deposit? — CD 101 guide
- How Do CDs Work? — mechanics explained
- No-Penalty CD Rates 2026 — best liquid CD rates
- Bump-Up CD 2026 — rate-increase CDs explained
- Callable CD 2026 — callable CD risks and rewards
- IRA vs CD 2026 — tax-advantaged CD investing
- Share Certificate 2026 — credit union CDs explained
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