l have never had a CD before and do not know much about them....Capital One offers one at 5.26 interest rate for 5 years.If l put a set amount in can l add to it during the 5 years and is the interest tax deductible?

Not only is it not tax deductible, you must pay taxes on the interest.

Generally u cannot add or remove to or from a CD until it is up for renewal. So u can not do anything with a 3 year CD until the three years is up. That is why the bank gives u a little more interest - they know they have to money to use as their own for three years without worrying about u coming in to get it. If u could do that, it would be just like a savings account.

The interest is taxable. And u get to pay tax on whatever u accrued during the tax year even though u have not really even seen it. For example, the three year CD will accumulate interest & tack it onto the CD. Even though u wo not have the interest in ur pocket for three years, u pay tax on it this year.

Just the opposite. The interest paid is taxable income (in the U.S.).

Sadly, no.

If you want tax free interest, look into your state general obligation tax bonds (this is tax advise only, not investment advise) and see if it makes sense. They usually pay a lesser interest rate, but it possibly might be more after taxes are considered. Or sometimes less. Case by case, you have to run the math.

A CD is for a fixed amount of money. You cannot add to it. Sometimes you can take the interest out without penalty, but that will reduce the yield on the CD.

Each year you will receive a tax document from the bank showing the interest your CD has earned. You will add this as interest income on your tax return.

Uh, interest is TAXABLE, not tax deductible. Tax deductions are for some money that you PAY OUT, not money that you receive.

And you do not add money to a CD during its term, it is for whatever you put in in the first place.

No. You pay taxes on the interest. It is income