How many CD accounts should I have? What experts say (2024)

It's no secret that current returns on certificates of deposit (CDs) are impressive. Some competitive CDs pay 5% or higher APYs on your savings. But, if you've researched opening one, you may have decided that just one isn't the right number for you.

CDs come with a wide range of terms. There are short-term options like those that require a 6-month or 1-yearcommitment. Then, there are long-term options with terms like 2-years, 3-years, 5-years and even longer. And, you may need to open several CD accounts if you practice a strategy like laddering. We asked several experts for their thoughts on the right amount of CDs to open. Below, we'll break down what they said to consider now.

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How many CD accounts should I have? What experts say

With so many different CDs available, and various investing strategies to choose from, it's often difficult to determine how many accounts you should open. "At the risk of sounding too predictable, the answer is, it depends," says Nick Covyeau, owner and financial planner at Swell Financial, a financial planning firm. Here's what to account for:

Consider what you have the money earmarked for

"Let's assume for a second that we have what we need in savings and nothing more," says John Mason, CFP, President of the financial planning firm, Mason & Associates. "And, let's say that's $50,000." Mason suggests splitting that $50,000 into two accounts, but investing in only one CD. "I'm a fan of $25,000 in savings and $25,000 in a CD."

But, if you're saving for a planned expense over the next one to three years, Mason says multiple CDs may be fitting. "Let's say I need to keep an extra $200,000 in cash for whatever reason. In that instance, I will typically break those up into at least two CDs." He says doing so "gives you the flexibility that if you have to break one CD for whatever reason, you're not breaking all of your CDs."

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Think about safety

One reason to save with a CD is because they're typically safe savings vehicles. But, that safety dwindles when you deposit too much into one account. "Federally insured banks and credit unions only [usually] insure up to $250,000 per depositor at each bank or credit union," explains Jim White, CFP, president at the financial planning firm, Great Oak Wealth Management.

And, it's important to consider your balances in all accounts at each financial institution. "If you have multiple accounts, such as checking, savings, etc., add all of those accounts up," says White. "Any amount above $2250,000 will be at risk for loss if there is an issue with the bank or credit union."

But, you can alleviate this risk by having multiple CDs. "You can easily overcome this risk by opening accounts at multiple financial institutions," explains White.

Your CD strategy

Your strategy should also be considered when choosing how many CDs you'll open. For example, if you follow a CD ladder strategy, it will involve the use of several CDs.

"I personally prefer owning more than one CD and implementing what is called a 'ladder' strategy,'" says Covyeau. "This involves purchasing several CDs with staggered maturities to take advantage and lock in higher interest rates both today and in the future."

Other considerations

Some of the experts we spoke with say that if you're focusing on the number of CD accounts you should have, you're focusing on the wrong thing. "The number of accounts is not important," argues Noah Damsky, CFA, principal at the financial planning firm, Marina Wealth Advisors. "There's no right number of CD accounts like there's no right number of checking, savings or brokerage accounts. What is most important is structuring the CD so that you have the right amount invested and for the right amount of time," says Damsky.

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The bottom line

There's no standardized number of CDs that's perfect for everyone. When you choose how many CDs you should open, consider what you're saving money for, insurance limits and your savings strategy. And, some experts say you shouldn't focus on the number of CDs you open. Instead, they say you should think about your savings goals and ensure your CD investments will help you achieve them. Compare today's leading CDs now.