How Many Americans Own Certificates of Deposits?
KEY POINTS
- CD ownership decline: CD ownership has fallen from 16.1% in 2007 to 6.5% in 2022, reflecting reduced popularity among American households.
- Income influences ownership: Higher-income households are more likely to own CDs and hold greater values, with the top 10% having a median CD value of $85,000.
- CDs and age correlation: CD ownership and value peak among those aged 65 to 74, while younger individuals under 35 have minimal CD investments.
Approximately 6.5% of Americans own certificates of deposits (CDs), with a median value of $26,000 and average of $98,980. Older and higher-income households are more likely to hold CDs, though ownership and value drops after age 75.
Motley Fool Money has reviewed the best CDs by term length to help savers find the most competitive options.
Read on for a deep dive into CD ownership statistics.
Average CD ownership rate and value
Of all Americans, 6.5% hold CDs, according to a 2022 survey from the Federal Reserve. The median value of CDs held was $26,000 and the average was $98,980.
| Percent Holding CDs | Median Value of CDs | Average Value of CDs |
|---|---|---|
| 6.5% | $26,000 | $98,980 |
CD ownership rates have steadily declined from 2007, when 16.1% of households owned them. The median value of CDs held peaked that year, at $28,260, while the average value hit its high in 2019 at $118,190.
Average CD ownership rate and value by income
Rates of CD ownership and the value of CDs held rises with income. Among the top 10% of households by income, 10% own CDs with a median value of $85,000 and an average value of $269,610. CD ownership drops to just 4% of households in the bottom 20% by income, the median value falls to $28,000 and the average value is over $200,000 lower, at $63,490.
| Income Quintile | Percent Holding CDs | Median Value of CDs | Average Value of CDs |
|---|---|---|---|
| Bottom 20% | 4% | $28,000 | $63,490 |
| 20% to 39.9% | 5% | $45,000 | $72,290 |
| 40% to 59.9% | 6% | $18,000 | $61,980 |
| 60 to 79.9% | 7% | $21,000 | $45,470 |
| 80% to 80.9% | 11% | $20,000 | $81,640 |
| Top 10% | 10% | $85,000 | $296,610 |
Average CD ownership rate and value by age
The rate of CD ownership increases with age while the value of CDs held by household peaks among those 65 to 74. Among Americans 75 and older, 12.4% hold CDs with a median value of $33,000 and average value of $100,630. The percentage of households with CDs among those aged 65 to 74 drops one percentage point to 11.4% but the median value is higher at $53,000 and the average value is $138,400.
Just 1.7% of Americans younger than 35 hold CDs. The median value of CDs held by that age group is $10,000 -- on par with those aged 35 to 44 -- and the average value is $59,490, which is nearly $20,000 higher than Americans between the ages of 35 and 44.
| Age | Percent Holding CDs | Median Value of CDs | Average Value of CDs |
|---|---|---|---|
| Less than 35 | 2% | $10,000 | $59,490 |
| 35 to 44 | 4% | $10,000 | $40,090 |
| 45 to 54 | 5% | $14,000 | $99,930 |
| 55 to 64 | 7% | $25,000 | $83,700 |
| 65 to 74 | 11% | $53,000 | $138,440 |
| 75 or older | 12% | $33,000 | $100,630 |
Average CD ownership rate and value by race and ethnicity
Eight percent of white Americans hold CDs, making them more likely than Black, Hispanic, and households with other races and ethnicities to hold them. White Americans also hold more CDs than other groups, with $32,000 being the median value of CDs held and $104,650 the average among white Americans.
Hispanic households are least likely to own CDs, and those that do hold the lowest amount compared to other groups. Just 2% of Hispanic households hold CDs, with a median value of $8,000 and average value of $25,120.
| Race/Ethnicity | Percent Holding CDs | Median Value of CDs | Average Value of CDs |
|---|---|---|---|
| White | 8% | $32,000 | $104,650 |
| Black | 3% | $10,000 | $55,780 |
| Hispanic | 2% | $8,000 | $25,120 |
| Other | 7% | $15,000 | $98,340 |
Are CDs a good investment?
Understanding how CDs work is a first step to determining if they're the right financial option for you. CDs are among the safest ways to earn a guaranteed return on your cash over a predetermined period of time, because their interest rates are locked in over the course of the term length. The catch is that you can't access the cash you've deposited before the term ends without paying a penalty.
CDs come in a range of term lengths, from 6-month CDs to 5-year CDs, and there are different types of CDs that each have their own features.
That makes CDs a great option for those who have savings they know they won't need for a set period of time and don't want to worry about the volatility of the stock market or high-yield savings account rates.
Still, it's worth comparing CD rates to the best high-yield savings accounts and double checking whether you'll need the money you intend to set aside in the next six months. If you don't need the cash quickly and you can find a CD with a rate that beats the best high-yield savings accounts, then a CD might be the best choice for you.
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Sources
- Federal Reserve (2023). "Survey of Consumer Finances."
Our Research Expert
Jack Caporal is the Research Director for The Motley Fool and Motley Fool Money.