An 18-month CD can be a good investment option for individuals looking for a low-risk, predictable way to earn a higher return on their savings
Compare 18-Month CD Rates
One of the benefits of an 18-month CD is that it offers a relatively short-term investment option, making it suitable for individuals with medium-term savings goals. However, the funds deposited into an 18-month CD are not accessible during the term, and early withdrawal may result in an early withdrawal penalty.
When considering opening an 18-month CD, it's important to compare rates and terms from various banks and credit unions to ensure you're getting the best deal. You should also be aware of any fees, minimum deposit requirements, and early withdrawal penalties associated with the CD.
Financial Institution | 18 Month CD APY | Minimum Deposit |
|---|---|---|
3.00% | $1,000 | |
4.15% | $1,000 | |
4.25% | $0 | |
4.25% | $0 | |
4.25% | $0 | |
4.40% (19 months) | $500 | |
4.00% | $500 | |
4.25% | $2,500 | |
4.00% | $1,000 | |
4.35% | $2,500 | |
4.60% | $1,000
| |
3.00% | $50 | |
4.50% – 4.70% | $1,000
| |
4.50% – 4.15% | $1,000 | |
5.00% | $2,500 | |
4.75% | $1,000 | |
4.50% – 4.55% | $1,000 | |
4.25% | $500 | |
4.25% | $25,000 | |
3.75% | $500 | |
4.15% | $1,000 |
Top Offers From Our Partners
Compare Early Withdrawal Penalty For 18-Month CDs
The early withdrawal penalty for an 18-month CD can vary depending on the institution, but it's typically a percentage of the amount withdrawn or a certain number of months of interest.
As we can see in the table, most penalties from the 18-month CD are ranging between 90 days to 180 days of interest. This may be lower than the penalty for longer-term CDs such as 4-year CDs or 3-year CDs. However, compared to short terms if up to one year that usually incur maximum 90 days of interest, the penalty for 8-month CD is higher.
Financial Institution | Early Withdrawal Penalty |
|---|---|
6 months of interest
| |
N/A | |
180 days of interest
| |
90 days of interest | |
6 months interest | |
180 days of interest | |
6 months interest
| |
365 days / 30% of dividends
| |
180 days of interest
| |
25% of interest | |
180 days of dividends
| |
60 days of interest
| |
Schwab Bank | N/A |
100% of interest | |
Dividends for 180 days
| |
180 days interest
| |
180 days of interest
| |
180 days interest
|
Does 18-Month CD Is A Good Idea For Your Needs?
While you can get higher interest compared to moist deposit products, you'll need to lock your money for a significant period. Especially in situations of economic uncertainty as we see these days, each investor should consider this.
Here are some cases when it may be a good idea:
Medium-term savings goals: If you have a medium-term savings goal, such as saving for a car or a home down payment, an 18-month CD can be a good option. The fixed term of the CD can help you save towards your goal and the interest earned can help you reach it faster.
Conservative investors: If you are a conservative investor who wants to earn a higher return than a traditional savings account without taking on significant risk, an 18-month CD can be a good option. The fixed interest rate and term make it a predictable and low-risk investment option.
- You won't need the money in the next 18 months: If there is any chance you'll need the money, it may be better to consider shorter terms such as a 6-month CD or 1-year CD. However, if you don't need the money – 18-month CD offers decent interest rate compared to most options.
18-Month CD vs. Savings Account
Choosing between an 18-month CD and a savings account depends on your individual financial goals and needs. Here are some factors to consider when deciding between an 18-month CD and a savings account:
Interest rates: As we can see in the table below, 18-month CDs generally offer higher interest rates compared to savings accounts. If earning a higher return on your savings is your priority, an 18-month CD may be a better option.
Accessibility: Savings accounts offer greater liquidity, allowing you to withdraw funds without penalties. With an 18-month CD, your funds are locked in for the full term, and early withdrawals may incur penalties. If accessibility to your funds is important, a savings account may be a better option.
Fees and minimum deposit requirements: Consider the fees and minimum deposit requirements associated with both options. The minimum deposit for CDs is usually higher than a savings account. While this is not so common, some banks and credit unions may charge fees for opening or maintaining a savings account, and minimum deposit requirements can vary.
Financial Institution | 18 Month CD APY | Minimum Deposit |
|---|---|---|
3.00% | Up to 4.85% | |
4.15% | N/A | |
4.25% | 4.65% | |
4.25% | 4.20% | |
4.25% | 4.25% | |
4.40% (19 months) | 0.05% – 0.70% | |
4.00% | 0.10% | |
4.25% | 4.25% | |
4.00% | 3.00% | |
4.35% | 4.50% | |
4.60% | $1,000
| |
3.00% | 0.10% | |
4.50% – 4.70% | 0.30% | |
Schwab Bank | 4.50% – 4.15% | N/A |
5.00% | 5.00% | |
4.75% | 4.00% | |
4.50% – 4.55% | 0.25% | |
4.25% | 4.40% | |
4.25% | N/A | |
3.75% | 4.30% |
How We Picked The Best 18-Month CD Rates: Methodology
The Smart Investor team has conducted a thorough review of banks and credit unions to identify the best 18-month CD (Certificate of Deposit) rates available. We focused on four main categories to rate them:
Interest Rates and Terms (50%): We examined the interest rates offered on 18-month CDs and any associated terms and conditions. Banks offering higher interest rates and favorable terms, such as low minimum deposit requirements and reasonable penalties for early withdrawal, received higher ratings in this category.
Account Features (20%): This category assessed additional features and benefits offered by each 18-month CD, such as automatic renewal options, choices for interest payouts (monthly, quarterly, or at maturity), and eligibility for promotional rates. CDs with more features or flexibility earned higher scores.
Customer Experience (20%): We evaluated the ease of opening an 18-month CD, communication with customer service representatives, usability of online banking platforms (tested by our team), and availability of support channels. Banks with smooth processes, responsive customer service, and user-friendly online interfaces received higher ratings.
Financial Stability and Reputation (10%): Our team analyzed each bank's financial stability and reputation, considering factors such as customer satisfaction ratings, JD Power scores, TrustPilot reviews, and the bank's Better Business Bureau (BBB) profile. Banks with strong financial standings and positive reputations received higher ratings.
We assigned weights to various features and qualities within each category to ensure a comprehensive evaluation of each 18-month CD.
