Important points
With no minimum deposit requirements, CDs can guarantee a high yield without requiring you to set aside a large amount of capital. Many CDs require a deposit of $500 or more, but there are also many CDs that have no minimum deposit requirements at all. The benefit of a CD with no minimums is that you can take advantage of higher earning potential on a portion of your savings while keeping the rest of your funds in a more accessible account, such as a high-yield savings account.
Although yields on many certificates of deposit (CDs) have been trending downward, they are still higher than yields over 10 years outside of the current interest rate cycle. This means you still have time to lock in a high yield, and you’ll be thanking yourself once the rates on your new CD drop further.
Even if a bank lowers the interest rate on newly issued CDs, fixed-rate CDs are guaranteed to have the same yield until maturity. The interest rate is fixed (rather than floating like most savings accounts), so this interest rate won’t change over the term.
You may be interested in taking advantage of the high fixed yield of CDs without locking up a large amount of money (considering that most CDs come with early withdrawal penalties). CDs often require a set minimum deposit, some of which can be $10,000 or more, but the good news is that many banks don’t require a minimum deposit.
Below is a list of federally insured banks that offer CDs with no minimum deposit requirements. Such CDs can be a good option for savers who want to secure a high annual percentage yield (APY) on select funds while maintaining a healthy balance in a liquid savings account for emergencies .
What are the benefits of a CD with no minimum deposit?
CDs with no minimum deposit requirements are more accessible to all savers. It’s common to find CDs with starting prices of $500, $1,000, or more, but it’s also not hard to find CDs with no strings attached. The benefits of no minimum CD are:
These CDs can be opened by anyone with a certain amount of savings, not just those who plan to deposit more than a certain amount. Without a minimum deposit requirement, you’re less likely to lock up money in a CD that you might need in the near term for emergencies or other living expenses. In a declining interest rate environment, the benefit of fixed-rate CDs (regardless of minimum deposit requirements) is that you continue to earn the same interest rate throughout the term, even if the bank lowers the current interest rate on newly issued CDs.
In addition to looking for a CD that doesn’t require a minimum deposit, it’s also important to consider a variety of other factors.
APY: Look for CDs that offer competitive APYs. Although yields on many CDs have declined in recent months, it’s still relatively easy to find CDs that yield above the inflation rate. At these rates, your money won’t lose purchasing power while sitting in your account. And even if the rates on new CDs keep dropping, you’ll be grateful you secured a good rate. Use Bankrate’s CD calculator to determine exactly how much you’ll get on your deposit, taking into account APY and term length.
Term Length: Choose a CD term that fits your spending plan. For example, if you plan to get married in a little over two years, a two-year CD may be a viable option. Duration typically ranges from 3 months to 5 years or more. It’s important to consider the length of the term, as most CDs have early withdrawal penalties, which are fees for accessing the money before the end of a certain term.
Federal Deposit Insurance: Choose a bank insured by the Federal Deposit Insurance Corporation (FDIC) or a credit union insured by the National Credit Union Administration (NCUA). This keeps your funds safe in the event of a financial institution failure, up to $250,000 per depositor, per insured bank or credit union, and per ownership category. (If you’re looking for CDs at a credit union, keep in mind that these are often called stock certificates there.)
Keep money somewhere else for emergencies: With a guaranteed interest rate CD, it’s important to set aside funds you won’t need before the term ends. This way, you avoid being subject to interest charges and early withdrawal penalties that can eat up part of your balance. Before deciding what to put in your CD, take into account that you have enough money to cover your daily expenses and emergency fund.
Banks offering CDs with no minimum deposit
1.) Ally Bank
CD term length range: 3 months to 5 years
Additional Details: Ally Bank offers competitive APYs on all CDs consisting of 7 Standard CDs, 1 No Penalty CD, and 1 Price Increase CD. This online-only bank also offers high-yield savings accounts, money market accounts, and interest-bearing checking accounts, all of which require no minimum opening deposit.
2.) American Express National Bank
CD term length range: 11 months to 5 years
Additional Details: American Express National Bank offers seven terms of traditional CDs, all of which earn APYs well above the national average. We also offer high-yield savings accounts and checking accounts that earn competitive APYs.
3.) Barclays
CD term length range: 3 months to 5 years
Additional details: Many of the 9 CD terms offered by Barclays earn high APYs. Barclays also offers two savings accounts, neither of which require a minimum deposit or monthly service fee.
4.) Capital One
CD term length range: 6 months to 5 years
Additional Details: Capital One offers 10-term CDs and offers competitive interest rates for a large bank. The bank’s high-yield savings and interest-bearing checking accounts also don’t require minimums.
5.) Sync Bank
CD term length range: 3 months to 5 years
Additional Details: In addition to nine standard CDs, Synchrony publishes a strong lineup of specialty CDs, including No Penalty CDs, Bump Up CDs, Traditional IRA CDs, and Roth IRA CDs. None of these require you to set a minimum balance.
CDs with low minimum deposit amount
In addition to CDs having no minimum deposit requirements, various banks and credit unions only require relatively low minimums, making them very accessible to many savers.
Minimum deposit amounts, terms and product availability listed in this article are current as of October 16, 2024. Check with your bank or credit union for the latest information.
CD Alternatives with No Minimum Deposit
CDs, which don’t require a minimum balance, are a viable option for savers who don’t have the desire or means to put down a large amount of money. However, if you don’t want to lock your funds into a CD for the entire term, there are various alternatives that don’t require you to set a starting minimum deposit.
High-yield savings account
It’s not difficult to find a high-yield savings account with no minimum deposit requirements. Online-only banks often don’t have minimum requirements, but you may be able to find such an account at a bank with branches.
For example, you can also find high-yield savings accounts with no minimum deposit requirements at each of the five financial institutions in the above list of banks that don’t require minimum deposits for CDs.
money market account
Like savings accounts, money market accounts are generally liquid accounts, so you don’t have to lock up your money for a period of time. However, the number of transactions may be limited. However, when it comes to minimum deposit requirements, finding a money market account without such a requirement can be more difficult than a savings account.
That said, various banks now offer money market accounts with no minimum deposits. These include Ally Bank, Sallie Mae Bank, and Synchrony Bank.
conclusion
With no minimum deposit requirements, CDs allow more savers to secure some funds at a guaranteed rate. Luckily, it’s not hard to find CDs with no minimum deposit when you shop around. Other factors to look for in a CD include a high APY, federal deposit insurance, and an acceptable term length.
