Jumbo CD

A jumbo certificate of deposit (CD) typically requires a minimum deposit of $100,000, but they return a higher interest rate than traditional CDs. A jumbo CD is generally considered a risk-free investment since they can be federally insured up to $250,000.

Terry Turner, Financial writer for Annuity.org
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    Terry Turner

    Terry Turner

    Senior Financial Writer and Financial Wellness Facilitator

    Terry Turner is a senior financial writer for Annuity.org. He holds a financial wellness facilitator certificate from the Foundation for Financial Wellness and the National Wellness Institute, and he is an active member of the Association for Financial Counseling & Planning Education (AFCPE®).

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    Lee Williams, Senior Financial Editor for Annuity.org

    Lee Williams

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    Lee Wiliams is a financial editor for Annuity.org. As a professional writer, editor and content strategist, Lee has strengthened the brand storytelling for global and nationally recognized brands in the higher education, advertising and marketing fields.

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    Chip Stapleton

    Chip Stapleton

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  • Updated: May 17, 2023
  • 3 min read time
  • This page features 5 Cited Research Articles
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APA Turner, T. (2023, May 17). Jumbo CD. Annuity.org. Retrieved June 10, 2023, from https://www.annuity.org/personal-finance/banking/certificate-of-deposit/types/jumbo/

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Jumbo CDs are one of several types of certificates of deposit. CDs typically return higher interest than regular savings accounts. In comparison, jumbo CDs return higher interest rates than traditional or several other types of CDs. You are required to make a large minimum deposit when buying a jumbo CD.

What Is a Jumbo CD and How Is It Different from Other CDs?

A jumbo CD is one of several different types of certificates of deposit. It’s notable because of its large minimum deposit requirement – typically $100,000, though some banks may allow lesser minimum deposits.

In exchange for this higher deposit requirement, banks typically offer higher interest rates on jumbo CDs than for most other types of CDs.

Rates vary – some may top one percent interest for long-term investments if you look closely – and you should shop around to find the best possible rate before settling on a jumbo CD.

Pros and Cons of Jumbo CDs

Like all investments, jumbo CDs carry both benefits and risks. It’s important to weigh the pros and cons of a jumbo CD before deciding to buy one. In addition, understanding the advantages and disadvantages of different types of CDs can be a useful part of your overall financial literacy.

Jumbo CD Pros and Cons


  • Typically, you will get a higher interest rate than most other types of CDs.
  • Jumbo CDs may be FDIC insured for up to $250,000 if you buy the CD from a Federal Deposit Insurance Corp. bank or National Credit Union Administration (NCUA) credit union and follow other rules.
  • They make a good short-term investment option for large amounts of idle money – attractive to large companies or pension funds.
  • Businesses can use their jumbo CDs as collateral for loans.


  • You may be able to find non-jumbo CDs that have a higher yield.
  • You may lose money eventually if the jumbo CDs interest rate is outpaced by inflation – especially in a long-term CD.
  • They carry an early withdrawal penalty that could wipe out your interest gains.
  • If interest rates fall as the jumbo CD hits maturity, you may not be able to reinvest at the original rate.

While jumbo CDs – and other types of CDs – may be insured, this is only the case if the bank or credit union where you purchase your CD is an FDIC insured bank or NCUA insured credit union. Be sure to check with the issuer before committing to any certificate of deposit.

The $250,000 insurance also applies to the total amount of money you have in all accounts with one bank. It does not apply to each CD or each account. It’s important to know what is insured or not insured before making a deposit into a CD.

You should also be aware of any early withdrawal penalties. These vary from bank to bank and on the jumbo CD’s term, also known as how long the CD takes to mature. Be sure to ask what your penalties might be if you choose to take your money out of any CD early.

Jumbo CD Rates

Jumbo CD rates – like the rates for all other CDs – can fluctuate, but they are all typically determined by three factors.

Factors that Determine Jumbo CD Rates

  1. The term before your CD matures – typically between three months and 10 years.
  2. The current interest rates and how much interest banks are currently paying on deposits.
  3. The bank or credit union and how much they expect to earn from your deposit.

Typically, you can get higher interest rates if you go for a longer-term CD. You should consider how long you can comfortably leave your deposit in a CD, then look for the best interest rate within that time frame.


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Last Modified: May 17, 2023

5 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Federal Deposit Insurance Corporation. (2021, October 18). National Rates and Rate Caps. Retrieved from https://www.fdic.gov/resources/bankers/national-rates/
  2. Federal Deposit Insurance Corporation. (2021, May 8). Insured or Not Insured? Retrieved from https://www.fdic.gov/deposit/covered/notinsured.html
  3. U.S. Consumer Financial Protection Bureau. (2016, August 15). What Is a Certificate of Deposit (CD)? Retrieved from https://www.consumerfinance.gov/ask-cfpb/what-is-a-certificate-of-deposit-cd-en-917/
  4. Discover. (n.d.). How Are CD Interest Rates Determined? Retrieved from https://www.discover.com/online-banking/banking-topics/how-are-cd-interest-rates-determined/
  5. U.S. Securities and Exchange Commission. (n.d.). Certificates of Deposit (CDs). Retrieved from https://www.investor.gov/introduction-investing/investing-basics/investment-products/certificates-deposit-cds