Pros And Cons Of Jumbo CDs

Key takeaways

The typical minimum amount to open a jumbo CD is $100,000, although some jumbos require a minimum of $95,000, even less.
Although many jumbo CDs offer competitive APYs, there are many standard CDs that earn higher yields than jumbos, so it’s important to compare rates.
Depositing a large amount of money in any type of CD, be it a standard or jumbo CD, can be risky if you have to withdraw the funds early in an emergency, triggering an early withdrawal penalty.

If you’re looking to invest a large sum of money in a certificate of deposit (CD), and want to earn a higher yield on it, a jumbo CD might be the right choice. Like a standard CD, a jumbo CD comes in a variety of terms, and the money from it earns a guaranteed, fixed annual percentage yield (APY) until its maturity date.

Typically, though, jumbo CDs require a minimum deposit of $100,000 or more. While there are some advantages of locking in such a high deposit amount, there are also some things to look out for before you commit to one of these large-deposit CDs.

What is a jumbo CD?

As the name suggests, a jumbo CD is a time deposit account that usually requires a large minimum deposit, typically at least a $100,000. When it comes to yields and earning interest, jumbo CDs and standard CDs typically have fixed APYs.

But the main difference between standard CDs and jumbo CDs is the minimum amount of money that you need to open one. For instance, a standard CD might have a minimum deposit requirement ranging from a penny to $1,000. But jumbo CDs often require a minimum deposit of at least $100,000, though some jumbo CDs have lower minimum deposit requirements, such as $95,000, or lower. For instance, USAA Bank has a jumbo CD available if you deposit at least $95,000 into it and it offers a super jumbo CD for deposits of at least $175,000.

While standard CDs are available at most banks, jumbo CDs are not as common. Some banks and credit unions that offer jumbo CDs include: CIT Bank, Connexus Credit Union and Credit One Bank.

Pros of jumbo CDs

Higher interest rates

One of the benefits of locking your money away for a period of time is that you’re often rewarded with a higher rate of return. Consider how CD rates compare with Bankrate’s best high-yield savings account rates: the national average savings rate, according to Bankrate data as of early August 2025, is 0.57 percent, while the national average rate for a one-year CD is 2.03 percent.

Guaranteed rate of return

As with most other types of CDs, jumbo CDs come with a fixed interest rate. That means the rate you get when you first open the CD is the rate that money will continue to grow at for the entire term.

A guaranteed fixed rate can be advantageous, especially if interest rates drop in the future. While banks may lower the rates on other accounts, such as high-yield savings and money market accounts, the money in a CD will continue to earn the same yield until it matures.

Wide range of terms

The terms available for jumbo CDs vary by institution, but they usually range from three months to five years. It’s possible for jumbo CDs to come in shorter term lengths. KeyBank, for example, offers jumbo CDs that mature in as little as seven days.

Cons of jumbo CDs

High minimum balance requirements

Most jumbo CDs require at least $100,000 to open. A jumbo CD entails committing a larger sum of money for the term than other types of CDs.

Keep in mind that the money in a CD isn’t liquid, which means if you need to withdraw money from a jumbo CD before the term ends, you’ll potentially pay a hefty early withdrawal penalty. The penalty can cost you some, or all, of the interest earned on the initial deposit. Make sure you’re comfortable locking away a large amount of money before committing to a jumbo CD.

At a time when the economy is unpredictable, you may want to have more flexibility with where you keep your money. If it’s all tied up in one CD, you can’t use this money for other needs without paying a penalty.

Missing out on rising rates

If rates rise in the future, you could have your money locked into a jumbo CD and miss out on better CD rates. With any type of competitive CD, the more money that you deposit into an account, the more you’ll earn in interest. With a jumbo CD with a six-figure balance, being locked into one CD means you won’t be able to take advantage of higher APYs should interest rates increase.

Make sure to consider the various options available to you, including standard CDs, savings accounts and money market accounts, so you can take advantage of the best yields — not just now, but also as they fluctuate over time.

Limited insurance coverage

At all FDIC-insured banks and NCUA-insured credit unions, up to $250,000 of your deposits are protected, per depositor and per account ownership type. The nature of a jumbo CD is that it involves committing a large sum of money to the account. It’s important to make sure you don’t deposit more money than will be covered by federal insurance.

Federal insurance ensures that your money is protected in the event of a bank or credit union failure. While such closures don’t happen often, it’s still a possibility, and it’s better to have all of your money insured. If your total savings exceeds $250,000, you can split it between multiple financial institutions or account ownership types to receive full coverage.

Did you know?

If your total savings at a federally insured bank exceeds $250,000, you can split it between multiple account ownership types to receive full coverage. More so, a couple can get up to $1 million of FDIC deposit insurance at a bank if they each have $250,000 in an individual account and have $500,000 in a joint account (assuming they have no other money or accounts at the bank).

How to find a jumbo CD

Although jumbo CDs aren’t offered as much as standard CDs, you can still find them. Check with your bank or credit union before looking at other federally-insured institutions. Sometimes they don’t call them jumbo CDs, but it can be easily identifiable just by looking at the minimum deposit required to open an account. If you’re looking beyond your bank or credit union, simply check out the top jumbo CD rates in Bankrate’s current list of the best jumbo CD rates.

Bottom line

Before you decide whether opening a jumbo CD makes sense for you, determine if you have enough money for this type of CD. Then determine the purpose of this money and when you’ll need it. And finally, compare rates to find the right CD for you.

CDs are a good fit for specific goals that don’t require much near-term liquidity, and jumbo CDs are no different. For example, CDs aren’t well suited for an emergency fund but make sense for a savings goal such as a vacation fund.

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