Certificate of Deposit (CD) Rates at First Citizens BancShares — Product Overview

This product description presents a comprehensive overview of Certificates of Deposit (CDs) offered by the First Citizens BancShares banking affiliates. It explains how CD rates are structured, key features and benefits, typical term options, rate determination factors, interest calculation methods, account opening considerations, early withdrawal rules, and frequently asked questions. The intent is to help savers evaluate whether a First Citizens CD aligns with their savings objectives and liquidity needs.

What a CD Is

A Certificate of Deposit (CD) is a time-deposit account that typically offers a fixed interest rate for a specified term in exchange for committing funds for that period. CD rates are generally higher than those on standard savings accounts because funds are held until maturity. CDs are most suitable for savers who do not need immediate access to principal and who seek predictable, low-risk returns.

Key Features of First Citizens CDs

• Competitive fixed rates: Rate tiers vary by term length and deposit size; longer terms often carry higher rates.
• Multiple term options: Common terms range from short-term (e.g., 3 months) to long-term (e.g., 5 years or more), with intermediate choices available.
• Minimum deposit requirements: Minimum opening amounts differ by CD product; some promotional CDs may require larger initial deposits.
• Interest payment options: Interest may be compounded daily and paid monthly, quarterly, or at maturity, depending on the product selected.
• Automatic renewal: Many CDs automatically renew at maturity into the same term at the then-current rate unless instructions to the contrary are provided.
• FDIC protection: When held at an FDIC-member bank, deposits in an individual CD are eligible for FDIC insurance up to applicable limits.

Rate Structure and How Rates Are Determined

CD rates at First Citizens BancShares affiliates are influenced by market interest rates, the institution’s liquidity needs, promotional strategies, and the chosen term and deposit amount. Shorter-term CDs tend to reflect prevailing short-term rates, while longer-term CDs incorporate expectations about future rates and inflation. Promotional CDs or jumbo CDs may offer higher yields to attract new or larger balances. Rates are subject to change for new deposits; existing CD rates are generally fixed for the agreed term.

Interest Calculation — Examples (Hypothetical)

The following examples illustrate how interest might accrue on a fixed-rate CD. These examples are illustrative only and do not represent current offers.

• Example A — Simple maturity payout: A 12-month CD with a fixed annual percentage yield (APY) will compound according to the stated compounding frequency. Interest credited at maturity equals principal multiplied by (1 + APY) for one year.
• Example B — Monthly compounded interest: For monthly compounding, the effective yield is slightly higher than the nominal rate. Monthly interest is computed on the daily balance and added to the principal each month, resulting in compound growth over the term.

Opening a CD — What to Expect

Opening a CD typically requires completing an application, funding the account with the minimum deposit, and selecting term and interest payment options. Identification and required documentation are necessary to comply with banking regulations. Accounts may be opened in person at branch locations or through authorized account-opening channels provided by the bank’s affiliates.

Early Withdrawal and Penalties

CDs usually carry penalties for early withdrawal to discourage premature access to funds. Penalty amounts vary by term and may be expressed as a number of months’ interest forfeited or a percentage of the principal in specific circumstances. Penalties are disclosed at account opening and in the account terms. It is important to review early withdrawal terms before committing funds, as penalties can reduce or eliminate interest earned and, in some cases, dip into principal for short-term CDs.

Benefits

• Predictability: Fixed rates provide known returns for the duration of the term.
• Low risk: Principal and interest are generally protected when held at an eligible banking institution and within insured limits.
• Variety of terms: Multiple maturities enable laddering strategies to balance liquidity and yield.
• Potentially higher yields: CDs often yield more than standard savings accounts for committed funds.

Considerations Before Choosing a CD

• Evaluate liquidity needs: ensure funds can remain deposited for the full term to avoid penalties.
• Compare compounding intervals and APY to understand effective yield.
• Assess inflation risk: long-term fixed rates may lag rising inflation, reducing real returns.
• Confirm FDIC insurance coverage based on ownership category and aggregate balances.

Strategies for Using CDs

• Laddering: Stagger maturities to maintain periodic access to funds and take advantage of rate changes.
• Jumbo CDs: Larger deposits may qualify for enhanced rates; consider these when liquidity permits.
• Promotional term selection: Short-term promotional CDs can be used as place-holders while monitoring longer-term rate trends.

Frequently Asked Questions

Can the rate change after the CD is opened?

For fixed-rate CDs, the contractual rate remains in effect for the term. Renewals are executed at prevailing rates at the time of renewal unless different arrangements are made.

How is interest taxed?

Interest earned on CDs is generally taxable as ordinary income in the year it is paid or credited. Consult a tax professional for implications specific to personal circumstances.

Are CDs covered by deposit insurance?

When issued by an FDIC-member bank and held within insurance limits, CDs are eligible for FDIC coverage. Verify coverage based on account ownership categories and total balances.

Conclusion

Certificates of Deposit available through First Citizens BancShares banking affiliates present a structured, low-risk option for savers seeking predictable returns. By understanding rate structures, term options, compounding methods, and early withdrawal rules, savers can select CD products that align with financial goals. Consider laddering and matching term lengths to liquidity needs, and review account disclosures carefully before committing funds.

Address Bank: Raleigh, North Carolina, U.S.
Bank: First Citizens BancShares
Headquarters: Raleigh
Products: Banking & Savings
Type: Cd Rate