A few significant factors determine how much cash you should hold in a certificate of deposit (CD):
To open the account, you must have the minimum amount of savings required by the CD.
If you’re saving for a shorter-term objective, like a down payment on a house, make a deposit big enough to cover the expense out of interest from the CD.
You might want to put less of your money in CDs if you’re saving for a longer-term objective, like retirement, and think about other assets that could generate significantly higher returns over time.
What is the minimum deposit for a CD?
Most CDs require at least $500 to $1,000 to open, though some have no minimum deposit requirements.
Here are the minimum deposit requirements for some major banks.
| Bank | Minimum deposit |
|---|---|
| Ally Bank | None |
| Bank of America | $1,000 |
| Capital One | None |
| Chase Bank | $1,000 |
| Marcus by Goldman Sachs | $500 |
| U.S. Bank | $500 |
The fact that many financial institutions offer tiers of interest rates should be noted. This implies that by making larger minimum deposits, consumers can earn higher interest rates. For every additional $50,000 placed, the rate, for instance, might be raised by 0.1 percent by the bank.
Also keep in mind that there can be varying minimums for different CD types, like CDs with no penalties or CDs with increases.