Can you add money to a CD?

The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.

Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, our opinions are our own. See how we rate banking products to write unbiased product reviews.

• 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.

Quick tip: The most important distinction between these accounts is that traditional CDs do not allow you to deposit of money during a term, but add-on CDs let you add money at any time. Not all financial institutions offer add-on CDs, and those that do offer limited term options. Add-on CDs still may be worthwhile if you need flexible CD options for additional deposits.

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."

Note: A high-yield savings account has a variable interest rate, which means the rates can change at any time. However, the best high-yield savings accounts still pay higher rates than average savings accounts.

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 recently amended 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.