Can I Deposit More Funds Into My CD Account After It's Open?

Add-on CDs allow additional deposits.

Certificates of deposit, also known as CDs, are available in several different varieties. Investors should be familiar with some of the ways they can make the most of this type of investment.

The Facts

CD accounts give individuals an opportunity to deposit a certain amount of money for a set amount of months or years to earn variable or fixed interest on it. Unlike a savings account, a CD account is only designed to give depositors access to their initial investment until the end of the term. Additional funds may also be deposited into certain types of CDs.

Potential

Some CD accounts include an add-on feature or are known as add-on CDs. This feature allows depositors to add more money to their account and get the same interest rate at which they made their original investment. This feature helps investors maximize the return on their investment even if the interest rate falls after their initial deposit.

Considerations

Although investors can deposit additional funds into their add-on CD after they open it, there may be some requirements. Some financial institutions require a minimum of $500 for each additional deposit.

References

• FDIC: Certificates of Deposit: Tips for Savers
• Bankaholic: What is Add-On Certificate of Deposit?