Can You Be Denied a CD? It Happened to Me

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When you apply for a loan or credit card, there are different reasons why your application may not get approved. You could easily get denied if your credit score isn't in good shape, or if you already have a lot of debt relative to your income. You could also be denied a loan if your income doesn't meet your lender's requirements and it's worried that you don't earn enough money to keep up with your monthly payments.

But opening a bank account is a bit different. With a bank account, you're not asking to borrow money -- you're asking to put money you already have into a specific place. So even if your credit score isn't great and your income isn't so high, it's generally not that difficult to get approved to open a new bank account.

But earlier this year, I tried opening a CD at an online bank and got denied. And to this day, I have no idea why.

A puzzling situation

Because CD rates have been strong this year, I was interested in opening one during the winter to capitalize. I researched rates across different banks and found what I thought was the best one. I then went through the motions of applying to open an account online by entering information that included my name, address, and Social Security number.

When I got an email a few minutes later saying that my application was rejected, I was puzzled. I was interested in opening a $10,000 CD. And I had the $10,000. I wasn't asking anyone to loan it to me or give it to me. So frankly, I'm not sure why the bank in question didn't want my money.

Here's the extra-baffling part. I had my husband go through the motions of trying to open a CD to see if maybe the issue was with my Social Security number, or with something related to me specifically. But his application was denied, too. And like me, all he got was a vague email response saying that he'd been rejected.

Now since this bank had a really good CD rate on offer, I decided to try to contact its customer service team to speak to someone about the situation. After waiting on hold for almost an hour, I gave up and moved on to a different bank that had a comparable CD rate.

Thankfully, that second bank did not deny my application. And my money has been sitting in one of its CDs since.

It's best to investigate

I'll admit that I didn't really handle the above situation as best as I could, because it's an odd thing to have a bank account request denied. So I should've made an effort to follow up, even if it meant waiting on hold again to speak to customer service. To this day, I don't know why my application wasn't approved, and it probably would be good information to have.

That said, because my husband was also denied, I'm inclined to chalk it up to a glitch in the system. But if you're systematically denied a bank account, you should try to speak to someone at the bank that says no to figure out what the issue is.

If you have a history of overdrawing accounts or writing bad checks, you might have a bad report with ChexSystems -- which could potentially prevent you from getting to open a bank account. But if the problem is a poor credit score, that shouldn't stop you from getting a bank account.

All told, my situation worked out okay in the end because I was able to find a comparable CD rate at a different institution. I should probably, at some point, try applying for a CD again at that original bank to see what happens and investigate if I'm denied a second time.

But that's admittedly not high on my list of priorities given my busy schedule. So for now, it shall remain a mystery.

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