Certificates of Deposit (CDs)

Certificates of Deposit (CDs) are savings accounts that earn a fixed interest rate in exchange for not withdrawing the funds for a certain time period, which can be months or years depending on what you need. Generally, the shorter the term, the higher the rate. United Community Bank offers several term options. 

See Certificates of Deposit current rates.

CDs have several advantages:

• Generally higher interest rates than personal savings accounts
• Interest rates that are predictable
• As long as your bank in insured by the Federal Deposit Insurance Corporation (FDIC), your CDs are insured up to a certain limit of all your deposits combined (currently $250,000)
• Lower risk than stocks and bonds
• Range of terms, or length of time between opening a CD and withdrawing funds with interest.

Any investment comes with benefits and risks. The disadvantages of CDs are:

• More limited liquidity than cash assets like checking and savings accounts that you can access immediately
• Generally lower returns than stocks and bonds
• Financial penalty for early withdrawal

The federal government hasn’t set an official limit across banks, but many banks set their own limits to balance their risk.
Keep in mind that FDIC insurance only covers CDs up to the limit of all your deposits combined at a given bank. If the bank fails, each individual depositor will only be insured up to $250,000 as of 2026.

Generally, no. Cash assets are readily available or, in banking terms, highly liquid. Cash assets include:

• Physical currency, dollars and cents
• Checking accounts
• Savings accounts

CDs aren’t as liquid as cash assets because you usually can’t access the funds until a certain date, the maturity date, without paying a penalty.

CDs are taxable unless they’re held within a qualified retirement plan like a 401(k) or a traditional Individual Retirement Account (IRA).

Otherwise, The Internal Revenue Service (IRS) considers the interest you earn on CDs taxable income, just like your paycheck. You’ll pay taxes on your earnings from CDs every year, not just once when the term is up and you withdraw the funds.

When you have a CD with United Community Bank, we’ll provide you with a Form 1099-INT at the end of the year that shows how much interest you earned for your tax return.

Generally, yes. Compound interest is like earning interest on interest. The original principal you put into a CD earns interest. That interest is added to the principal (compounded), which continues to earn interest. This compounding happens on a set schedule. It may be daily, monthly or quarterly. The more often interest is compounded, the more you’ll benefit.

The right CD for you depends on a few factors:

• Whether you can meet the minimum deposit for particular CDs
• How long you can commit to leaving the money untouched
• The amount of interest you want to make

If you need to withdraw the money before your term is up, you may have to pay a penalty.

See Certificates of Deposit current rates.

No. The rate remains the same from the time you buy a given CD to the end of the term, when you cash it out. This rate is guaranteed by your bank. It’s a contractual agreement that you and the bank sign.

CDs are issued by financial institutions authorized by the federal government to accept deposits and pay interest. These include:

• Banks like United Community
• Credit unions
• Brokerage firms

Make sure the financial institution is reputable and FDIC-insured. (Not all financial institutions are.)

As long as your bank is FDIC-insured, your CDs are insured up to a certain limit. FDIC insurance only covers CDs up to the limit of all your deposits combined at a given bank. If the bank fails, each individual depositer is only insured up to $250,000 as of 2026.

Yes. Minors can’t buy their own CDs directly, but you can buy them on their behalf through a custodial account that transitions to them when they turn 18 or 21, depending on your state.

Yes, but in return for the flexibility of a no-penalty CD, you’ll likely have:

• A lower interest rate
• Fewer choices of banks

Find your nearest United Community branch.