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U.S. Bank is one of the biggest banks in the United States, so it’s no surprise that it offers a dizzying array of CDs. The more important question — one you’re perhaps asking right now — is “are they any good?”

Without giving the game away entirely, U.S. Bank’s CD lineup is a mixed bag. Most of its CDs have yields too low to seriously consider, but it does have a few that pay competitive interest rates. Whether any of those fit your needs depends on how much money you can bring to the table, how long you want to keep your cash tied up, and what your plans are after the initial term ends.

U.S. Bank Certificates of Deposit

Three of the four U.S. Bank CDs have very low interest rates and aren’t worth considering. The special CD has far more competitive yields and is definitely worth checking out if you’re in the market for a new CD.

The minimum deposit is $1,000 for all but the standard CD, which you can open with just $500. All U.S. Bank CDs have FDIC insurance up to the statutory requirement of $250,000.

Special CD Terms & Yields

U.S. Bank has four short- to medium-term special CDs with competitive yields:

The minimum deposit is $1,000.

Note that the advertised rate varies by geographic location and is good for the initial term only. Unless you close the account and withdraw your funds, the CD automatically renews at maturity into a standard CD with the closest term length — and a much lower interest rate.

Other U.S. Bank CD Types

Their low yields take them out of contention unless you really don’t care about getting a return on your investment, but for posterity, these are U.S. Bank’s three other CD types:

• Standard CD. Terms range from one month to five years. Yields range from 0.05% APY* on the shorter-term CDs to 0.25% APY* on the five-year CD. 
• Step-up CD. This is a 28-month CD that automatically steps up its interest rate every seven months. But that doesn’t get you very far. The starting yield is 0.05% APY* and the ending yield isn’t much better at 0.65% APY*.
• Trade-up CD. This CD type offers 30-month or five-year terms. You can raise your interest rate once if U.S. Bank’s offered rate increases during your term, but there’s no guarantee of this. And again, the starting yields are frustratingly low: 0.10% APY* for the 30-month and 0.40% APY* for the five-year.

What Sets U.S. Bank CDs Apart?

U.S. Bank’s CDs stand out for a few reasons, not all of them positive:

• Competitive yields on the special CDs. U.S. Bank’s four special CDs yield well above the average for big banks in the United States — up to 4.95% APY* on the 19-month CD. 
• Special CD yields only good for the initial term. The other side of the special CD coin is that their above-average yields are good only for the initial term, the longest of which lasts 19 months. After that, unless you close the account, the CD renews into a standard CD with a similar term length and a far, far lower yield.
• Hefty early withdrawal penalties. U.S. Bank’s CD early withdrawal penalties involve some complicated math, but you pay a $25 penalty right off the bat and then forfeit some or all of the accrued interest. If you withdraw early in the term or cash out a shorter-term CD early, you could lose some of your initial investment.
• Lots of junky options. Due to their low yields, the large majority of U.S. Bank’s CDs are barely worth discussing. Unless you don’t care about getting a competitive return on your cash, you can write off the standard CDs, Step Up CDs, and Trade Up CDs.

Key Features of U.S. Bank CDs

Before you apply for a U.S. Bank CD, understand how they work and how to make sure you get the most out of your account.

Opening & Funding a New CD

You can open your new U.S. Bank CD online in a few minutes. Once open, you can fund it with an inbound transfer from an external bank account or an instant transfer from an existing U.S. Bank checking or savings account.

If you’re funding your CD with external money, it might take one to three business days for the deposit to hit, and you’ll earn slightly less interest as a result.

Interest Calculation & Credit Schedule

U.S. Bank compounds interest daily and deposits it into your CD at the end of the year or the end of the term, whichever comes first. On CDs with terms under one year, you receive all accrued interest at once, when the CD matures.

Early Withdrawal Penalties

If you withdraw principal from your CD or close your account entirely before it matures, you must pay an early withdrawal penalty. 

This penalty comes in two parts: a flat $25 fee that applies to all early withdrawals, and a variable penalty based on the CD’s term and size. U.S. Bank calculates the variable penalty as follows:

• Terms of six months or less: The greater of all the interest you would have earned if you held to maturity or 1% of the amount withdrawn.
• Terms greater than six months to one year: The greater of 50% of the interest you would have earned if you held to maturity or 1% of the amount withdrawn.
• Terms greater than one year: The greater of 50% of the interest you would have earned if you held to maturity or 3% of the amount withdrawn.

Depending on how much cash you withdraw and how early in the term the withdrawal occurs, you could lose some of your principal (your initial investment) in addition to much or all of the interest you would have earned on the principal.

CD Maturity & Renewal

If you don’t do anything, your CD automatically renews at maturity into a fresh CD with an identical or similar term. 

Importantly, special CDs don’t roll into new special CDs when they mature. Instead, they become standard CDs with much lower interest rates.

Closing or Making Changes to a Maturing CD

You have a grace period of 10 days from the maturity date to close your account or make changes, such as depositing more cash, withdrawing some but not all of your principal, or changing to a different term. You can do this online, by phone, or in a U.S. Bank branch.

Unless you’re not at all concerned about getting the best return on your money, it’s in your interest to cash out your special CD in full at maturity. If the special CD rates are still available and you have another source of cash, you can open a fresh special CD — an extra step, but well worth it.

Pros & Cons

U.S. Bank CDs have some upsides and some downsides. Here’s a summary of both.

Pros

U.S. Bank’s most notable CD advantages are that they have a few competitive CDs while still being relatively easy to interact with.

• Yields well above average on the special CDs. U.S. Bank’s special CD yields are among the best on the market for the corresponding term lengths. Though they’re only good for one term, they’re worth pursuing.
• Reasonable opening deposit. You need $500 to open a standard CD (which isn’t a good deal due to its low yield) and $1,000 to open other types of U.S. Bank CDs, including special CDs. That’s not as low as some banks, but it’s reasonable in comparison to many others.
• Easy to open an account online. It takes just a few minutes to open a U.S. Bank CD online. There’s no need to visit a branch or pick up the phone.

Cons

U.S. Bank CDs have some important disadvantages. The common denominator is that most simply aren’t competitive with top competitors..

• Below-average yields on most CDs. Other than the special CDs, U.S. Bank’s CDs have underwhelming yields. They’re just not worth it unless you really don’t care about getting a good return on your money.
• Can only earn the special CD yield for one term. The special CD yield is good for only one term. When the CD matures, it rolls into a standard CD with a similar term length and a much lower yield. You can game the system by reopening a special CD with different funds, but there’s no guarantee the promotion will be available when the time comes.
• High early withdrawal penalties. U.S. Bank CDs have high early withdrawal penalties. The math is complicated, but the bottom line is that there’s a good chance of losing all your accrued interest plus some principal.
• No terms longer than five years. Five years is a relatively long time, but if you have a very long investment time horizon and don’t want to put your money in the stock market, it might not be long enough. Some other banks offer CDs with terms as long as 10 years.

How U.S. Bank CDs Stack Up

U.S. Bank has many competitors in the CD business. Some of them compare quite favorably, like Quontic Bank. Before you open a U.S. Bank CD, see how it stacks up against Quontic’s lineup. 

Overall, U.S. Bank makes sense if you can live with a shorter-term special CD and don’t want to deal with a human at any point. Otherwise, Quontic Bank is the superior choice due to its high yields and no “special CD” funny business.

Final Word

U.S. Bank’s CD lineup has four different types spanning more than two dozen terms. Its four special CDs have legitimate appeal thanks to their high yields and reasonable opening deposit requirements. Unfortunately, the rest yield so little that they aren’t worth a second thought — not with so many other fantastic CD options on the market.

Even the special CDs come with frustrating strings attached, particularly the fact that the high promotional rate is only good for one term. If you already bank with U.S. Bank and you’re looking for a quick boost to your savings return, opening a special CD makes sense. Otherwise, look to an online bank with a better overall CD lineup.

*Rates vary by state and zip code. Please click “Open an Account” above to see your rate before applying.