How Long Is Settlement Day for Certificate of Deposit?

It can be difficult to find a relatively safe investment choice for your money. If you are looking for a low risk financial instrument that can provide you with income and easily be converted to cash, you may consider opening a Certificate or Deposit account. Unlike many other types of investments, CDs can be bought and fully settled in the same day.


A Certificate of Deposit is a type of high-yield deposit account not unlike a savings account. When an individual opens a CD account he is agreeing to keep a fixed amount of money in that account for a specified period of time. In exchange for keeping money in this account, the account holder earns a relatively high interest rate on his money. Most banks and financial institutions require a minimum deposit of $500 to $1,000, with investment times frames ranging from three months to five years.


Most financial instruments have a settlement date ranging from three days to one week. For example, if a stock is traded on a Monday, the seller has three days from the trade date (Thursday) to get the stock to the buyer, and the buyer has three days from the trade date to receive her stock. If a CD has a known CUSIP, or security identification number, then it should settle almost instantly once the trade is complete. When a CD has an unknown CUSIP, it can take up to a week or more for the trade to settle.

Maturity and Interest

The longer you invest in a CD, the higher the rate of return or interest you can earn. Likewise, the greater the amount of money you invest in the CD account, the greater your overall profit. If you choose to invest in a long-term CD, you should make sure that you do not need to access the money in the account during the investment period. Once your CD expires, or reaches the agreed-upon investment time, you can either withdraw the money from the account or choose to reinvest it.


Specific CD terms and rates vary depending on the type of CD that you invest in. As a result, there may be penalties for early withdrawal or termination (call) features attached to your CD. If your CD comes with a call feature, your bank or financial institution can cancel your CD at any time, which means that you may earn less interest than anticipated. You can purchase a CD at most banks or financial institutions.