Certificate of Deposit Accounts
Certificates of Deposit (CDs) are debt instruments issued by commercial banks and savings and loan institutions. When you invest in a CD, you loan the bank a set amount of money. For the use of your money, you are promised the return of your principal plus interest over the life of the CD.
Scottrade Bank offers Scottrade Bank CDs with terms ranging from 30 days to 5 years and requires a minimum deposit of $500 per CD. Scottrade Bank CDs are insured by the FDIC to the maximum extent permitted by law.
Funding Your CD and Interest Rates
Once you open a CD account with Scottrade Bank, you have up to 10 business days from the date the account is opened to fund your CD. You may fund your new CD with your existing Scottrade Bank or brokerage account, or by transferring funds from another bank. The interest rate applied to your CD account will be the highest interest rate available during the ten-day funding period. CD interest rates depend on the length of the CD's term, and rates are generally higher for CDs with longer terms. For Scottrade Bank CDs:
- Interest will be credited to your account on the last calendar day of the month.
- Interest is calculated on the basis of the actual number of days elapsed over a 365/366-day year.
- Interest in accrued daily and paid monthly.
You can find up-to-date interest rates offered for Scottrade Bank CDs on the Scottrade site, or by calling Scottrade Bank's automated telephone banking system at 1-800-SCOTTRADE (1-800-726-8872).
Understanding CD Maturity
A CD's life is called the CD's term. When you purchase a CD from Scottrade Bank, you can choose a term between 30 days and 5 years. The end of the CD's term is called the CD maturity date and, at the maturity date, you can choose to be paid the interest earned on your CD plus your initial deposit. To choose to receive the full payments on your CD, you will need to contact your local branch within 10 calendar days of the CD maturity date. Scottrade Bank will send you an electronic notification 10 days before your CD reaches maturity. If you do not contact your branch to collect your funds, your CD will be automatically renewed for the length of the original time period. The minimum balance to earn interest is $500.
Early Withdrawal* Penalty
If you choose to withdraw from your CD agreement before the CD reaches maturity, an early withdrawal penalty is assessed to your account based on the following scale:
- If your account has an original maturity of 90 days or less: The fee we may impose will equal seven days interest on the amount withdrawn subject to penalty not to exceed the interest earned.**
- If your account has an original maturity of 91 to 364 days: The fee we may impose will equal 90 days interest on the amount withdrawn subject to penalty not to exceed the interest earned.**
- If your account has an original maturity of 12 to 59 months: The fee we may impose will equal 180 days interest on the amount withdrawn subject to penalty not to exceed the interest earned.**
- If your account has an original maturity of 60 months or longer: The fee we may impose will equal 365 days interest on the amount withdrawn subject to penalty not to exceed the interest earned.**
Early withdrawals are subject to penalties. Fees could reduce earnings.
**We may impose a penalty of 7 days interest, on the amount withdrawn subject to penalty, if the withdrawal is made within the first six days after the deposit. In certain circumstances such as the death or incompetence of an owner of this account, the law permits, or in some cases requires, the waiver of the early withdrawal penalty.