Business Insider's personal finance team compared Fidelity CDs to the best CD rates and discovered it was a standard offering. Its CD rates are generally strong, but they change often, and brokered CDs might be harder to manage compared to regular CDs.
Fidelity is an investment, retirement planning, and financial advisory firm with locations around the U.S. It offers a wide range of financial products, including CDs.
If you're considering buying CDs to boost your savings goals, Fidelity CDs may be a smart option. Here's what to know about Fidelity CD rates before making a decision.
Current Fidelity CD Rates
Fidelity CD rates, which go up to 4.60% APY, are significantly higher than the average CD rates, and some even rival or beat the highest CD rates on the market.
Fidelity's CD terms range from 3-month CDs to 20-year CDs. Here's a look at how Fidelity CD rates break down by term:
| CD Term | APY (Annual Percentage Yield) |
| 3 months | 4.30% |
| 6 months | 4.25% |
| 9 months | 4.25% |
| 1 year | 4.40% |
| 18 months | 4.40% |
| 2 years | 4.50% |
| 3 years | 4.50% |
| 4 years | 4.50% |
| 5 years | 4.60% |
| 10 years | 4.50% |
| 20 years | N/A |
Overview of Fidelity CDs
Types of CDs Available Through Fidelity
Fidelity offers brokered CDs, meaning the company purchases its CDs from other financial institutions and resells them to the customer. This allows consumers to open CDs with several banks at once — all with one point of contact through Fidelity.
Brokered CDs typically have higher interest rates than traditional CDs do, though interest doesn't compound as it usually does with regular CDs. Brokered CDs also don't charge early withdrawal penalties, and you can sell your CD any time if you need cash before it matures.
How to Buy CDs on Fidelity
To open a CD with Fidelity, you'll need a brokerage account or retirement account with the company first. This is where your CDs will be held and your interest deposited upon maturity. You can also select an "auto-roll" option that lets you roll your money — plus the interest you earned on it — into a new brokered CD once an old one matures.
Fidelity CD Pros and Cons
Fidelity CD Pros
- High interest rates
- Many term options
- FDIC-insured
- No early withdrawal penalties
- You may sell your CDs at any time
- Auto-roll feature lets you automatically invest in a new CD at maturity
Fidelity CD Cons
- Interest does not compound
- You must have an existing brokerage or retirement account with Fidelity
- You may lose money if you sell your CD before maturity
Fidelity CD Alternatives
Fidelity CDs vs. Synchrony Bank CDs
Synchrony Bank CD rates are 0.25% to 4.35% APY, which aren't as high as Fidelity rates — though they're traditional CDs, so interest compounds daily. Synchrony also offers more CD options than Fidelity.
Synchrony Bank CD types include bump-up CDs and no-penalty CDs, and terms range from three months to five years. Both Fidelity and Synchrony Bank CD rates are higher than national averages.
If you're specifically interested in brokered CDs, Fidelity will likely be the better option for you.
Fidelity CDs vs. Capital One 360 CDs
Capital One 360 CD rates are high overall, but they're not quite as high as those offered by Fidelity. Capital One 360 CD rates are 3.50% to 4.00% APY. Capital One CDs are traditional CDs with interest that compounds monthly.
Capital One's CDs don't have term lengths as long as Fidelity's CDs. If you want a CD with a term length of 10 years or up, you'll probably want to go with Fidelity.
What Influences Fidelity CD Earnings
Trying to figure out if it's the right time to get a brokered CD? We'll explain important factors that influence CD earnings so you can see if a Fidelity CD is a suitable option for you.
Call Risk in CD Earnings
Brokerage firms like Fidelity can offer callable CDs. These CDs can be called back by the financial institution before your account reaches maturity. If your CD is called back, you won't earn the total interest you would've received if the CD had fully matured.
Financial institutions usually call back an account when CD rates drop. If rates are steady or rising, callable CDs are less likely to get called back.
Fidelity Partner Banks
Fidelity has CDs issued by banks. Brokerage customers benefit from this because they can get competitive CD rates that are significantly higher than average CD rates.
Market Fluctuations and the Fed's Actions
The Fed's actions can also impact Fidelity CD rates. CD rates fluctuate when the Federal Reserve raises or lowers the federal funds rate. Paying attention to upcoming Fed meetings can help you gauge whether CD rates might change in the future.
CD Laddering Strategies for Fidelity CDs
If you want more liquidity from your Fidelity CDs while still locking in a good interest rate, a CD ladder might be a good choice. With the CD ladder strategy, you'll open multiple CDs of different term lengths with the money you originally intended for just one.
For example, if you're interested in opening a 1-year CD with $30,000, you would instead open a 6-month, 1-year, and 2-year CD with $10,000 apiece. That way, you're getting some of your money back sooner in case of an emergency, but you're still locking in a good interest rate for a significant amount of time.
Fidelity CDs vs. Other Banking Products
Fidelity CDs vs. High-Yield Savings Accounts
While Fidelity CDs don't come with the same early withdrawal penalties as traditional CDs, you're still disincentivized from closing out the CD early because selling on the secondary market can involve more risk. If you want more liquidity for your money, you might prefer a high-yield savings account.
High-yield savings accounts are variable-rate accounts that, like CDs, offer high interest rates. You can withdraw your money at any time, but in exchange, your interest rate can change at any time. This can be helpful if interest rates go up, but your savings could suffer if rates go down.
Fidelity doesn't offer any high-yield savings accounts, but it does offer the Fidelity Cash Management Account. This account works more like a checking account, but it does offer an interest rate of 2.21% APY.
Fidelity CDs vs. Money Market Accounts
Money market accounts work a lot like high-yield savings accounts in that they're variable-rate accounts with high interest rates. The main differences are that money market accounts sometimes offer tiered interest, which means you need to keep a certain amount of money in the account to earn the highest rate, and that they often come with additional ways to withdraw money from the account, such as checks and debit cards.
Fidelity doesn't have a money market account. It has money market funds, which is a type of mutual fund and not a deposit account.
Fidelity CDs vs. Treasury Securities
Treasury bonds work like CDs, in that they offer a fixed interest rate on your money. With a treasury bond, you're buying debt from the U.S. government in exchange for a certain rate of return. These bonds have longer term lengths than CDs, generally lasting decades.
You can buy treasury bonds through Fidelity.
Should You Invest in CDs Through Fidelity?
Fidelity CDs may be a good option if you're looking for brokered CDs with high interest rates. You must have a Fidelity brokerage account in order to get CDs.
Some of Fidelity's CD rates rival the best CD rates on the market — though like any brokered CD, they do not compound interest.
Why You Should Trust Us: How We Reviewed Fidelity CDs
To review Fidelity CDs, we used Business Insider's certificate of deposit methodology. Our methodology considers interest rates, minimum deposit requirements, CD term variety, the company's overall ethics, security, miscellaneous features, mobile app quality, and customer service.
We assign each category a rating between 0 and 5, and star ratings can be anywhere from one to five stars.
We use a weighted average to get our star rating, which means we weigh certain features, like interest rates and fees, at a higher weight percentage than others. We understand that these areas can more heavily impact a person's overall banking experience.
Fidelity CD Rates FAQs
Yes, Fidelity CDs are legitimate certificates of deposit. They allow you to earn a preestablished interest rate on a single deposit if held to maturity — anywhere from three months to twenty years.
Fidelity is a good choice for CDs, as its interest rates are much higher than the national average. Fidelity CDs are not a good choice if compounding interest is important to your savings strategy, though, as these are brokered CDs that offer only simple interest.
If you're purchasing or selling a CD on the secondary market, there may be a $1 trading fee for CDs. It depends on the CD, though.
Fidelity CDs are insured by the FDIC. All Fidelity CDs are bought through FDIC-insured banking institutions, so consumers are protected on up to $250,000 in deposits at each individual bank.
Yes, you must have a Fidelity brokerage account to invest in CDs. Brokered CDs are specifically for brokerage customers.
