Santander offers certificate of deposit (CD) accounts that range from three months to five years. Rates are competitive with some of the best CD rates on the market, but it is possible to find higher rates. At the same time, customers contributing $100,000 or more may earn higher interest rates.
There is a relatively low account minimum of $500 for all CDs. That makes Santander CDs a viable savings option for more people. Interest only compounds monthly but you still earn a considerable amount because of the competitive interest rates. You also have some flexibility with your earnings because you can also transfer interest payments to another Santander account. Though the Santander CDs are attractive with high-interest rates and low minimums, you'll still need to be sure to talk with your local Santander branch to learn the current rates in your location.
Below we go over all the factors you should consider if you're looking into a Santander CD account.
|CD Length||Minimum Deposit||APY|
15-Month CD Interest Rate Comparison
Overview of Santander CDs
Santander has two main types of CDs: retail and jumbo. Retail CDs have a minimum deposit of $500 and are the standard CD that most customers will use. Interest compounds monthly on all retail CDs. Jumbo CDs have a minimum of $100,000 and may have higher interest rates. The interest for a jumbo CD is paid only at maturity if the CD is one year or less in term length. If the term length is at least one year, interest compounds monthly.
Terms for both CD types range from three months to five years. You will find as you compare CD rates, that longer terms usually have higher interest rates. This is not always the case with Santander. To get the highest rates you should also have at least a checking account with Santander. This could open you up to higher “relationship rates.” The Santander website is not very clear what CD rates are available at any given time, so you should call, email or visit a local branch to find all the current offerings.
You may also see some promotional CDs. These vary in term length but typically offer the most competitive rates from Santander. You should check with your local branch to see the current promotional offers.
When you earn interest in a CD account, Santander will credit the interest to your account. You can then withdraw all that interest when your CD reaches maturity. You also have the option to credit the interest to another account with the bank (like a high-interest savings account, checking account or money market account), or Santander can mail you the interest payment as a check. If you want to keep track of how much interest your CD is earning, you can choose to receive monthly account statements. Statements are available through the mail and electronically.
When your CD matures, Santander gives you a seven-day grace period to make any changes to your account. You can withdraw funds, add funds or even close your account without paying any penalties. This is the only time that you can withdraw money without paying a penalty. If you don’t make any changes during the grace period, Santander will automatically renew your account for another CD of the same term length. The interest rate on the new CD will depend on the currently available rates.
If you want to withdraw your principal from a CD before it reaches maturity, you will pay an early withdrawal penalty. The penalty you pay depends on the length and type of your CD. Retail CDs of one year or less in length have a penalty of three months’ interest. CDs over one year but less than five years in length have a penalty of six months’ interest. A CD with a term over five years has a penalty of one year’s interest. The penalty is based on the amount of the principal you withdraw. So if you withdraw $1,000 from a six-month CD, you will pay three months’ interest on $1,000.
How Much You Earn With Santander CDs Over Time
Santander only compounds interest monthly (or at CD maturity), but you will still earn good interest because of the competitive interest rates. Most long-term CDs have higher interest rates, so you can expect to earn more interest if you choose a multi-year CD. However, you can expect good returns even if you can only afford to contribute the $500 minimum.
The table below shows what your approximate total balance will be depending on your initial deposit and your term length.
|Initial Deposit||15-Month CD||18-Month CD|
How Santander’s CD Rates Compare to Other Banks’
Santander’s CD rates compare well with other banks’, but they’re not always the highest. If you are looking for long-term CDs, you can find higher rates at traditional banks like Capital One. Long-term investors may also want to consider brokers like Vanguard and Edward Jones. Both brokers offer higher rates than Santander and offer CD terms of up to 10 years. The main drawback with brokers is that they require a higher minimum deposit than Santander. They also work slightly differently than traditional banks, so you should make sure to understand how they work before opening any accounts.
If you’re looking for short-term CDs, you should also consider online banks like Ally. Ally offers some CDs that are less than one year but still have interest rates of about 0.60%.
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Compare Santander Bank to Other Competitive Offers
Should You Get a Santander CD Account?
Santander offers a variety of term lengths and its interest rates are competitive. It’s definitely worth considering if you are already a Santander customer or if you live near a local branch. Because rates vary by location, you will need to visit, call or email a local office to learn the current rates.
If you’re looking specifically for long-term or short-term CDs, you can find higher rates elsewhere. Those looking to create a CD ladder that regularly pays out interest will find that Santander’s range of three-month to five-year CDs is about the standard. You will be able to find 10-year options with other banks and brokers. As always, it’s useful to talk with a financial advisor if you have questions about the best way you can use CDs to save money.