What is a Jumbo CD?
A Jumbo CD is a certificate of deposit that requires a larger minimum deposit, typically $100,000 or more. In exchange for committing a larger sum of money, banks historically offered higher interest rates than standard CDs, though today the rates are often competitive with standard high-yield CDs.
Are Jumbo CDs Safe?
Yes, Jumbo CDs are safe provided they are held at an FDIC-insured bank or NCUA-insured credit union. The standard insurance limit is $250,000 per depositor, per institution. If you invest more than this amount in a single Jumbo CD, the portion exceeding $250,000 may not be insured. Investors with very large sums often spread their funds across multiple banks to maintain full coverage.