What Is a Jumbo CD?

What is a jumbo CD?

A jumbo CD is a certificate of deposit that traditionally requires a minimum deposit of $100,000. Some banks and credit unions offer jumbo CDs with lower minimums, such as $50,000.

Regular CD vs. jumbo CD

A jumbo CD requires more money to open than a regular CD, which can have a minimum deposit requirement of, for example, $500 or $5,000. Some have no minimum, especially at some online banks such as Ally, Barclays and Capital One.

» COMPARE: Best jumbo CD rates

Jumbo CDs tend to have slightly higher interest rates, on average, than a regular CD, but you can generally find CDs with lower minimums that still have some of the best rates. The biggest banks, for reference, don’t tend to have high rates no matter how much you deposit.

» See more options: Best regular CD rates

Apart from different rates and minimums, regular and jumbo CDs work similarly. They both keep money locked up for a fixed period, usually from three months to five years. In return for sacrificing access to your funds, you earn an interest rate that is usually higher than that of a regular savings account.

» Want a short-term CD? See our list of the best 1-year rates

Regular CD rates vs. jumbo CD rates

In our analysis, credit unions tend to have the best jumbo CD rates. Here’s a look at some examples of jumbo CD rates compared to regular CD rates at a few credit unions. Many credit unions call CDs share certificates, or certificates. The difference in the rates of return, shown as annual percentage yields in the tables below, tends to be small.

Connexus Credit Union

Connexus’s regular certificates have a minimum opening requirement of $5,000 and its jumbo certificates require at least $100,000.

First Tech Federal Credit Union

First Tech’s regular certificates have a $500 minimum and its jumbo certificates require at least $50,000.

Navy Federal Credit Union

Navy Fed’s regular certificates have a $1,000 minimum and its jumbo certificates have a $100,000 minimum.

When to consider regular or jumbo CDs

CDs give some of the highest returns for deposit accounts, and they tend to work best for specific short-term goals, such as saving for a wedding or down payment for a home a few years down the road. 

But the federal deposit insurance limit for a bank account is $250,000. If you want the assurance that you will get all your money back if your bank or credit union fails, it’s a good idea to keep your deposit, and the expected interest amount you’ll earn, at or below that limit. To make sure your money is protected, you can also open a joint account, which insures $250,000 per co-owner, or consider multiple CDs from different banks.

» Need more funds insured? Learn how to insure over $250K

If you have enough savings for a jumbo CD, compare rates across both jumbo and regular CDs. In general, bigger CD minimums don’t mean higher rates.

People who prefer jumbo CDs might not want the risk that comes with investing money in the stock market. But if you can tolerate risk and want higher returns for long-term investments, consider a brokerage account.