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- Regular CDs only allow you to deposit money when you open an account or once it reaches maturity.
- With an add-on CD, you can make additional deposits throughout your term.
- Add-on CDs are usually only worth considering if you want a fixed interest rate for a set time; otherwise, you might prefer a high-yield savings account.
A certificate of deposit can be a good place for storing savings, but it typically isn't suitable if you plan to deposit more money into the account over time. If you open an add-on CD, though, you can make deposits at any time.
Is an add-on CD worth considering? We'll explain how to add money to a CD, compare these accounts to regular CDs and other savings accounts, and explore whether getting one is a good option.
Can you add money to a CD?
You cannot add money to most CDs. Typically, CDs only allow you deposit money when you open the account. Then you must leave your account balance untouched until your CD reaches maturity.
One specialty CD is an exception to this rule — an add-on CD. An add-on CD lets you deposit money while the account is open. In most cases, you can make unlimited deposits into an add-on CD. If there's a limit, it will be listed in the bank account agreement.
Traditional CDs. vs. Add-on CDs
You can use the chart below to understand the similarities and differences between add-on CDs and traditional bank CDs.
| Similarities | Differences |
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How add-on CDs work
You'll open a CD with a certain amount of money upfront. Depending on the financial institution, you'll probably need $100 to $500 to open an account. You'll also have the ability to deposit money throughout the term.
Similar to a regular CD, you'll have a fixed interest rate. This means you'll earn the same rate for the entire term. If you need to take out money before the end of the term, there will usually be early withdrawal penalties, as with regular CDs.
While add-on CDs offer more flexibility for depositing money, their interest rates are pretty low overall. Add-on CD interest rates aren't as competitive as the best CD rates.
You can use an add-on CD to put money toward a savings goal. CDs are low-risk places to keep money because they are protected by FDIC insurance. The FDIC protects up to $250,000 per depositor, per account category.
Understanding the timing for add-on CDs
Alvin Carlos, CFA, CFP, and managing director of District Capital Management, says add-ons might be worth considering if you would like to have a fixed interest rate for a set time.
"I would say that the best time for someone to consider an add-on CD is when they think the federal funds rate has peaked," adds Carlos. "Then maybe it might make sense to get an add-on CD because, let's say rates go down, you can keep adding to that CD at that higher rate even though rates have gone down for the other CDs."
Alternatives to add-on CDs
If the federal funds rate is rising or you're not specifically looking for a savings account with a fixed interest rate, you'll prefer a high-yield savings account over an add-on CD.
"It's much simpler if you go for a high-yield savings account," explains Carlos. "There's sometimes no minimum, and you can pull money out anytime."
Another option is a money market account. A money market account is similar to a savings account because it pays a variable interest rate. It has higher minimum opening requirements, though. Banks also often have debit cards or ATM cards with money market accounts.
High-yield savings accounts and money market accounts are considered liquid because you can deposit and withdraw money at any time. That said, high-yield savings accounts may have transfer limits.
The Board of Governors of the Federal Reserve has recentlyamended Regulation D, so banks may choose to suspend the monthly transfer limit so customers can make unlimited monthly transactions, or they could enforce a six-per-month limit. If your bank enforces a transfer limit on a savings account, you will have to pay a fee for any additional transfers once you reach the monthly limit.
If you are looking to get higher returns on your money, you might explore investing as well. Experts do not recommend investing money for short-term financial goals, though. Investing in the stock market involves risk. Investing money for long-term goals of more than five years is more suitable, in case of stock market fluctuations.
Add-on CDs FAQs
Can I add money to a CD?
Yes, but only if you open an add-on CD. Traditional CDs will only allow you to deposit money when you first open the account. If you'd like to add more money after the initial deposit, you'll have to wait until the term reaches maturity.
Are there any fees associated with adding money to an add-on CD?
No. If you have an add-on CD, there aren't any fees for depositing funds to an existing certificate of deposit.
How do the interest rates of add-on CDs compare to traditional CDs?
Add-on CDs often pay lower interest rates than traditional CDs.
Are add-on CDs safe?
Yes, add-on CDs are safe. Add-on CDs are bank accounts that are federally insured by a federal government agency like the NCUA or FDIC. Up to $250,000 is secure per depositor is secure.
Banking Editor
Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, budgeting, and general saving. Sophia was also a part of Business Insider's 2024 series "My Financial Life," which focused on telling stories that could help people live and spend better.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circ*mstances and overcoming their fears around money.ExpertiseSophia's expertise includes:
- Bank accounts
- Savings and CD rate trends
- Budgeting
- Saving
- How banks operate
EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.Sophia is a member of the National Association of Hispanic Journalists.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.
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