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    How to Open a CD Account in 5 Steps

    By Wasatch Peaks on August 1, 2023

    Topics: Savings

    Certificate of deposit (CD) accounts offer higher rates and guaranteed returns with all the security of a regular deposit account. That makes them a great way to save for a set goal or take the next step in turning your nest egg into real long-term wealth. 

    Ready to raise your savings game? Here’s how to open a CD account.


    If you’re ready to take your money places, then a CD account offers a great way to grow long-term savings for retirement and education—or to set aside cash for a major purchase like a new car or ATV

    You’ll get the convenience of an easy-to-set-up deposit account and you’ll be able to watch your money grow with none of the downside risk of a stock market investment. In fact, with your principal and interest insured in the same way as your checking account, you can invest with the confidence that you’ll never take out less than you put in.

    Let’s look at how CDs work and then break down some key steps and things to think about when you open a CD at a credit union or bank.


    A certificate of deposit allows you to earn interest on money by investing it for a fixed period of time in a special type of savings account. CDs are offered by most banks and credit unions and provide a no-risk return on investment on the money you set aside.


    A certificate of deposit account lets you invest money you do not currently need access to for a predetermined period (or term) of anywhere between three months to five years. In return, you are paid interest as a fixed dividend at predetermined intervals, typically monthly. 

    Dividends are usually reinvested until the certificate matures. The compounded interest you earn over time is known as your yield, usually referred to as an annual percentage yield (APY). 


    For savers willing and able to part with their money for a set period of time, CDs offer some big advantages:

    • A guaranteed return on investment on a fixed date
    • Higher interest rates than savings and money market accounts 
    • Deposits and interest are insured up to $250,000 per account by the federal government

    At the same time, remember that for most CDs, you’ll need to invest a larger minimum amount than required by deposit accounts, and your money remains inaccessible for the CD term—unless you pay a steep penalty to withdraw it. 


    Opening a CD is just as easy as opening your original checking or savings account. Whether you choose to invest at a bank or credit union, the process is essentially the same.


    Think about why you want to invest in a CD because different CDs will suit different needs. Are you building money generally for the long term or looking to save towards a specific goal? Specifically, think about:

    • How much you have to invest
    • How long you want to invest
    • How secure you are financially

    CDs used to have a reputation as a rather inflexible investment option. But that has changed as innovative local lenders like Wasatch Peaks Credit Union started offering CD accounts with an increasing range of features you might expect to see in money market or checking accounts. 

    Traditional CDs still offer the best returns over time but usually require a larger minimum deposit, which is paid as a one-time lump sum deposit into the account. They also often charge hefty penalties to access your money early. That makes these products best for people who:

    • Have already collected some savings to invest
    • Have a savings goal and a timetable for achieving it
    • Will not need to dip into their savings.

    Traditional CDs are great if you are putting away money for a wedding, a car down payment, a ski vacation, or are waiting for the market to stabilize before investing in stocks or a retirement account.

    It’s worth shopping around between banks or credit unions because rates do vary. Look for the highest annual percentage yield (APY) you can find. This will tell you how much your money will grow in the course of a year with interest compounded on your monthly dividends.

    Wasatch Peaks Credit Union offers competitive rates on CDs with a variety of terms. With a minimum deposit of as little as $500, a Wasatch Peak CD account will put you on the road to real savings.

    For savers who need more flexibility, some CDs allow you to add to your account as it grows and even to withdraw money under some circumstances. There are also CDs designed to help you save for certain purposes like retirement or to plan for a big upcoming expense.

    Wasatch Peaks offers our members a great range of tailored CD products designed to meet their specific savings needs:

    Flex Certificates allow early-stage savers to start contributing to a CD with:

    • An initial deposit of just $50
    • One-year term
    • Further deposits up to $10,000/month and up to $100,000/year as and when you can
    • APYs higher than a money market or regular savings account
    • Access to your money during a withdrawal window at the start of each quarter.

    Flex certificates are designed to help you build good savings habits while enjoying great growth potential, predictability, and security. It’s a great way to get a foot on the savings ladder.

    Dedicated Saver Certificates are designed for those looking to plan ahead to meet a specific expense, with:

    • Initial minimum deposits as low as $10
    • A required scheduled transfer from a checking account or payroll
    • One voluntary deposit transfer a month

    With a choice of terms and rates higher than a money market account, a Dedicated Saver Certificate is a sensible way to plan ahead for holiday spending, an upcoming vacation, or a special graduation gift.

    IRA Certificates offer the security and guaranteed returns of a CD along with the benefits of an individual retirement account. Get the jump on retirement saving now and enjoy increasing rewards over time.

    • Start an account with as little as $500
    • Contribute up to $6,500 a year from your income ($7,500 if you are over 50)
    • Make both post-tax (Roth) and pre-tax contributions
    • Enjoy tax-free earnings growth.

    Educational IRA Certificates allow you to build toward a great education for your child while protecting your investment from loss. And you can invest in higher-rate products as your education nest egg increases.

    • Family members can contribute up to $2,000 a year from post-tax income
    • Enjoy tax-free withdrawals for eligible education expenses including tuition, equipment, meals, housing, and more.


    Perhaps the single most important decision in opening a CD is choosing the term for your investment. Most institutions offer terms of between three months and five years on their CD products. 

    While many accounts may feature fairly similar interest rates on different products, it is the effect of these rates over time which adds real wealth-building value to your investment. It makes sense to choose the longest term you can, given your financial situation and savings goals. But remember in most cases there will be no way to access your cash until the end of this period.


    Once you’ve found a product that meets your individual saving needs it’s time to contact the financial situation to open your account. You’ll need to provide:

    • One or two forms of ID
    • Proof of residence 
    • Contact information

    You can apply either online or in person. You’ll also need to be able to transfer or deposit the starting balance for your investment. 

    While banks offer a wide range of CD products, joining a local credit union like Wasatch Peaks brings a particular focus on savings, local knowledge, and often higher yields and lower rates than commercial banks.

    If you’re serious about saving, it helps to build a relationship with a partner who is ready to grow with you. You’ll find a warm welcome and great service at Wasatch Peak Credit Union’s neighborhood branches serving Weber, Morgan, and Davis Counties.


    Most CD products allow you to have monthly dividend payments paid out to you as a balance transfer or check, or to have them reinvested into your account to attract further interest. To match the advertised APY for your CD and get the full benefit of compounding interest, you need to keep reinvesting your earnings. It’s the only way to build real wealth over time.


    Once you’ve found a product that meets your needs, opened an account, and deposited your principal, sit back and watch while time and interest work their magic. You’ll be surprised how fast your savings add up, and your financial dreams come closer to reality.


    Whether you’re just starting out or settling in for the long haul, northern Utah has a lot to offer. At Wasatch Peaks Credit Union, we’re here to help you make the most of everything that life in our hardworking mountain-front communities has to offer. 

    Whatever your savings goals or personal financial situation, Wasatch Peaks Credit Union has a certificate of deposit that will suit your needs. From a full ladder of traditional CD terms from three months to five years to our innovative Flex Certificates that let you add to your savings as they grow—our products provide our members with performance predictability and growth.

    Come into one of our local branches to discuss how we can serve your savings needs or click below to learn more about our CD products.



    Wasatch Peaks

    Written by Wasatch Peaks