Life Planning

How to Save More Money With CDs

Posted on Dec 12, 2023

How to Save More Money With CDs

If you want to save money for the future and earn more interest than a typical checking or savings account, consider a certificate of deposit (CD). This popular savings option helps you grow your hard-earned money faster than a standard savings account and opening a CD is easy. Why choose a CD over other savings account options? Learn the basics of CDs and how they can benefit your savings goals.  

What is a CD?

A certificate of deposit, or CD for short, is a savings option that allows you to deposit an amount of money for a specific period of time. In exchange, you’ll receive higher interest payments than typically found with money market accounts and traditional savings accounts. Additionally, CD accounts are backed by the Federal Deposit Insurance Corporation (FDIC), so you’re not at risk of losing money (up to the FDIC limit at the time of this article being published).

You can choose the length of the term, ranging from months to years, and earn interest. When your CD matures you can take the payout or reinvest in another CD. If you withdraw your money before the account maturity date, most banks will issue an early withdrawal penalty. It’s wise to invest in a CD when you can keep your money in a deposit account to maximize your savings. 

Laddering CDs

If you don’t want to tie up too much of your savings into a single CD, consider a CD laddering strategy. This approach offers a way to spread out your investment using multiple CDs with different maturity dates. 

With a laddering CD approach, you can grow your money at a higher interest rate than a typical savings account, and you don’t need to tie up all your savings at once. For example, if you had $10,000 to invest, you could open three CDs of $3,333 with different terms. Once each CD matures, you could choose to move that money into a new CD or take out your funds. 

Here’s an example* of how you could ladder various CDs: 

•    3-month CD: $3,333 at 3.05% Annual Percentage Yield (APY)
•    6-month CD: $3,333 at 4.10% APY
•    12-month CD: $3,333 at 4.55% APY

In this example, after 3 months, you’ll have grown $3,333 to $3,358.41. You can then deposit that money into a 12-month CD that earns 4.55% APY, cash out or keep it in a different account. Once your 12-month CD matures, you can reinvest that money in another CD to keep the ladder going. The idea is to stagger CDs and their maturity dates, so you always have money invested and funds that become available without penalty. The more money you invest for a longer period of time, the more interest you’ll earn. 

CD terms and options
You can open a CD account at First Hawaiian Bank for as little as $1,000 in branch or $500 online for an eCD. Our terms range from 7 days to 60 months for CDs and 6 months to 36 months for eCDs. Annual percentage yield depends on the term, type, and balance of a CD. For current CD rates, please visit

* The example is provided for demonstrative purposes only and may not represent the rates offered by First Hawaiian Bank. 

Related Articles