Table Of Content
Finding the top CD rates is not an easy task. While we did our best, rates are changing every day so keep in mind to validate the rates and always compare many options before opening a CD.
Highest CD Rates From Top Banks
Here are the best CD rates for a variety of terms. We picked the bank or credit union with the best rate for each term.
However, keep in mind that sometimes there are a couple of banks and credit unions with quite similar rates, so it's always a good idea to compare more institutions and also consider additional factors such as minimum deposit, convenience and early withdrawal fees.
Financial Institution | Term | APY |
|---|---|---|
Charles Schwab | 3 months | 5.51% |
Total Direct | 6 months | 5.51% |
NASA Federal | 9 months | 5.35% |
Connexus Credit Union | 1 year | 4.91% – 4.96% |
Vanguard | 18 months | 5.50% |
Merrick Bank | 2 years | 4.65% |
Bread Financial | 3 years | 4.25% |
Lafayette Federal Credit Union | 4 years | 4.42%
|
Popular Direct | 5 years | 4.30% |
CIT Bank | 11 months – no penalty | 3.50% |
Best 3 Month CD Rates
Three-month CD rates are notably lower when compared to those of 12 and 24 months. Additionally, the availability of three-month CDs is quite limited in many financial institutions, thereby restricting your options.
Financial Institution | 3 Months CD APY |
|---|---|
Fidelity | 5.40% |
Popular Direct | 5.30% |
Total Direct | 5.51% |
Brilliant Bank | 5.10% |
Alliant Credit Union | 4.25% |
Edward Jones | 5.40% |
Charles Schwab | 5.51% |
Vanguard | 5.40% |
Merrick Bank | 5.40% |
Best 6 Month CD Rates
6-month CD rates are usually higher than long-term CDs, as the Fed rate isn't supposed to change in the near future, and therefore, you can enjoy some of the highest rates with this term.
Financial Institution | 6 Months CD APY |
|---|---|
CIT Bank | 3.00% |
Sallie Mae | 4.80% |
Live Oak Bank | 4.80% |
LendingClub | 5.00% |
Merrick Bank | 5.40% |
Total Direct | 5.51% |
First Internet Bank | 5.13% |
Popular Direct | 5.30% |
Air Force Federal Credit Union | 4.65% |
Rising Bank | 5.35% |
Vio Bank | 5.25% |
Dow Credit Union | 5.21% |
Mountain America | 5.25% |
Quontic Bank | 5.05% |
Bellco Credit Union | 4.75% |
Prime Alliance Bank | 5.30% |
Bank 5 Connect | 5.05% |
Best 9 Month CD Rates
9 month CDs are also considered short-term. As such, they offer higher rates than long-term CDs in the current interest rate environment.
This is a good choice when you want to park funds for a short period with a fixed and predictable return while keeping them safe.
Financial Institution | 9 Month CD APY |
|---|---|
Synchrony Bank
| 5.10% |
Ally Bank
| 4.25% |
NASA Federal
| 5.35% |
Sallie Mae | 4.85% |
TIAA Bank
| 5.25%
|
Fidelity | 5.40% |
Marcus | 5.00% |
Merrick Bank | 5.35% |
Charles Schwab | 5.44% |
Vanguard | 5.45% |
Best 1 Year CD Rates
1-year CDs are the most popular option when it comes to CD terms, and therefore, almost every bank offers a CD for this term.
The top 1 year CD rates are considered a short-term period. therefore, they offer quite high rates compared to long-term CDs:
Financial Institution | 12 Months CD APY | Minimum Deposit |
|---|---|---|
4.80% | $0 | |
5.00% | $0 | |
4.35% | $0 | |
5.25% | $1,500 | |
4.70% | $2,500 | |
4.00% | $1,000 | |
4.91% – 4.96% | $5,000 | |
5.50% | $1,000 | |
5.45% – 5.35% | $1,000 | |
5.40% | $1,000 | |
5.05% | $2,500 | |
5.00%
| $1,000
| |
5.00% | $2,500 | |
5.15% | $2,500 | |
4.50% | $0 | |
5.00% | $500 | |
5.20% | $25,000 | |
5.20%
| $1,000 | |
5.15%
| $1,000
|
Best 18 Month CD Rates
An 18-month CD has an advantage in providing a moderately short-term investment choice, catering well to individuals with medium-term financial objectives.
Nevertheless, the money placed in this CD cannot be withdrawn until the term ends, potentially incurring penalties if accessed prematurely.
Financial Institution | 18 Month CD APY |
|---|---|
Fidelity
| 5.20% |
Synchrony Bank | 4.50% |
Ally Bank
| 4.45% |
Capital One Bank | 4.45% |
Discover Bank
| 4.40% |
Sallie Mae | 4.75% |
Schwab Bank | 5.45% – 5.35% |
LendingClub | 5.00% |
CommunityWide Federal Credit Union | 4.85% |
Merrick Bank | 4.75% |
Vanguard | 5.50% |
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Best 2 Year CD Rates
The best rates for 2-year CDs are generally slightly lower than shorter-term CDs, but you can still find a lot of options from a variety of banks and credit unions:
Financial Institution | 2 Year CD APY |
|---|---|
Connexus Credit Union | 4.53% – 4.58% |
PenFed Credit Union | 4.00% |
Sallie Mae | 4.50% |
LendingClub | 4.50% |
BMO | 4.40% (25 months) |
Merrick Bank | 4.65% |
Bread Financial | 4.65% |
Bask Bank | 4.50% |
CommunityWide Credit Union | 4.50% |
Best 3 Year CD Rates
In the current financial terms, the longer the term – the lower the rates, so it's natural to see a bit lower rates when it comes to 3-year CDs:
Financial Institution | 3 Year CD APY |
|---|---|
Connexus Credit Union | 4.11% – 4.16% |
Lafayette Federal Credit Union |
4.52% |
Alliant
| 4.20% |
Fidelity | 4.90% |
Vanguard | 5.35% |
Merrick Bank | 4.35% |
Bread Financial | 4.25% |
Populat Direct
| 4.50% |
Best 4 Year CD Rates
4 year CDs are less popular compared to other options, but those who are willing to lock their money for a long period of time can get the following rates:
Financial Institution | 4 Year CD APY |
|---|---|
Fidelity
| 4.65% |
Lafayette Federal Credit Union |
4.42% |
Capital One Bank
| 3.95% |
Alliant Credit Union
| 4.05% |
Popular Direct
| 4.25% |
Merrick Bank | 4.20% |
Bread Financial | 4.15% |
CommunityWide Credit Union | 4.10% |
Vanguard
| 5.25% |
Populat Direct | 4.25% |
Best 5 Year CD Rates
While requires commitment for a longer term, 5-year CDs are very popular among those who want to lock a quite high rate for a long time. Here are the top CD rates for five years:
Financial Institution | 5-Year CD APY |
|---|---|
Bread Financial | 4.15% |
Capital One Bank
| 3.90%
|
Discover Bank
| 3.75% |
Lafayette Federal Credit Union |
4.32% |
PenFed Credit Union | 3.20% |
Sallie Mae | 4.00% |
Popular Direct
| 4.30% |
Ally Bank
| 3.90% |
CFG Bank
| 4.05% |
Bethpage Credit Union
| 3.00% |
CommunityWide Credit Union
| 4.00% |
Alliant Credit Union | 4.00% |
Best No Penalty CD Rates
Only a few banks offer no-penalty CDs, as most banks want you to lock your money for a period of time if you choose a CD.
Keep in mind that it's quite similar to a savings account in terms of liquidity, and there are savings accounts that offer even higher rates than what you can get with no penalty CD:
Financial Institution | CD Term | APY |
|---|---|---|
Citi Bank
| 12 Months | 0.05% |
Marcus | 13 Months | 4.70% |
CIT Bank
| 11 Months | 3.50% |
Ally Bank
| 11 Months | 4.00% |
What To Know About CD Rates
When putting your money in a certificate of deposit (CD), you lock a specific amount of money for a fixed period, typically ranging from a few months to 5 years. In return, the bank pays you a higher interest rate than a regular savings account.
Here's how it works:
Deposit: You give the bank a lump sum of money, say $1,000 or more.
Term: You choose a term length, like 6 months, 1 year, or more, during which you cannot withdraw the money without paying a penalty.
Interest: The bank pays you interest on your deposit, and the rate is usually fixed for the entire term. This means you'll know exactly how much interest you'll earn.
Maturity: When the CD matures (reaches the end of the term), you can withdraw your initial deposit plus the interest earned. You can also choose to reinvest it in another CD.
CDs are low-risk investments, but they may offer lower returns compared to riskier investments like stocks. They're a good option if you want a safe place to grow your money over a specific period.
Which CD Term Is The Most Popular?
According to our survey findings about preferred CD terms, 37% of respondents favored a 1-year term. Following this, 24% expressed a preference for a 6-month term, while 12% each opted for 2-year and 3-year terms.
In contrast, the choices of a 4-year term and 5-year term garnered less popularity, with 7% and 5% of respondents choosing them, respectively. A minority of respondents (3%) selected the “Other” option.
Common CD Types
Common CD Types include:
Traditional CD: These are standard certificates of deposit with a fixed interest rate and term, usually ranging from a few months to several years. You can't withdraw your money before the maturity date without a penalty.
No-Penalty CD: With this type, you can withdraw your money before the maturity date without incurring a penalty. These CDs provide more flexibility but may offer slightly lower interest rates.
Jumbo CD: Jumbo CDs are for those who have a substantial amount of money to invest, usually at least $100,000. In return, they may offer higher interest rates.
IRA CD: These are certificates of deposit held within an Individual Retirement Account (IRA), offering tax advantages for retirement savings. They come in various terms and can be either traditional or Roth IRAs.
Bump-Up CD: This CD allows you to request a higher interest rate if rates in the market increase during your term. It provides some flexibility in a rising rate environment.
Brokered CD: These CDs are purchased through brokerage firms rather than directly from a bank. They may offer a wider range of options but can be less accessible to individual investors.
What’s The Minimum Deposit To Open A CD Account?
The initial deposit needed to open a CD can fluctuate significantly, influenced by the financial institution, CD duration, and various variables.
On average, the minimum deposit for a CD generally falls between $500 and $1,000. Nevertheless, some banks do not enforce a minimum, while others may stipulate a more substantial initial deposit, like $2,500 or $5,000.
Here are minimum deposit of some of the popular banks and credit unions:
Bank | Minimum Deposit |
|---|---|
Marcus | $500 |
Axos Bank | $1,000 |
Quontic Bank | $500 |
PenFed Credit Union | $1,000 |
Alliant Credit Union | $1,000 |
Barclays Bank | $0 |
Chase Bank | $1,000 |
CIT Bank | $1,000 |
Citi Bank | $500 |
Fidelity | $1,000 |
Capital One | $0 |
Vanguard | $1,000 |
Ally Bank | $0 |
Synchrony Bank | $0 |
Discover Bank | $2,500 |
Wells Fargo | $2,500 |
Merrick Bank | $25,000 |
Picking the Perfect CD: What to Consider
Choosing the perfect CD involves considering a few key factors:
Interest Rate: Look for the highest interest rate you can find. A higher rate means more money earned over time.
Term Length: Think about how long you can leave your money untouched. Short-term CDs offer easier access but may have lower rates, while longer-term CDs often have higher rates but require a longer commitment.
Penalties: Check the penalty for withdrawing your money early. Some CDs charge a fee that could eat into your earnings if you need to take out your money before the CD matures.
Goals: Consider why you're investing. If it's for an emergency fund, a shorter-term CD might be better. If it's for a long-term goal like retirement, a longer-term CD could make sense.
- Minimum Deposit Requirements: Ensure you can meet the minimum deposit requirement for the CD you're interested in. Some CDs have higher minimums than others.
- Bank Reputation: While all banks are FDIC-insured, you may prefer a reputable bank with experience and financial stability.
How To Build a CD ladder
A CD ladder is a smart way to manage your money by investing in a series of CDs with different maturity dates. It helps balance the benefits of higher interest rates with the flexibility of access to some of your money at regular intervals.
Here's how to build a CD ladder:
Start with a lump sum: Begin with a sum of money you want to save or invest, let's say $5,000.
Split it into equal parts: Divide this money into smaller, equal portions, for instance, five parts of $1,000 each.
Buy CDs with different terms: Invest each portion in separate CDs with varying term lengths. For instance, you could buy 1-year, 2-year, 3-year, 4-year, and 5-year CDs.
Reinvest as they mature: When the first CD matures (let's say the 1-year CD), you can either cash it out or reinvest it in a new 5-year CD. Continue this process as each CD matures.
This strategy ensures that you always have access to a portion of your money while benefiting from potentially higher interest rates on longer-term CDs. It's a way to balance safety and growth in your savings over time.
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CD Early Withdrawal Fees
CD Early Withdrawal Fees are charges imposed by banks if you take out your money from a CD before its agreed-upon maturity date. These fees are like a penalty for breaking the CD agreement. The amount of the fee varies depending on the bank and the CD's terms but can typically range from a portion of the interest you've earned to a percentage of your initial deposit.
For example, if you withdraw money from a 1-year CD after just 3 months, the bank might charge you a fee, which could eat into your earnings or even your initial deposit.
So, it's essential to be aware of these fees before you open a CD, as they affect your ability to access your money in case of emergencies or changing financial needs.
Here are the 1 year early withdrawal fees on different banks:
Financial Institution | Early Withdrawal Penalty For 12 Months CD APY |
|---|---|
Bread Financial
| 180 days simple interest
|
Synchrony Bank | 90 days of interest
|
Capital One Bank
| 3 months of interest
|
Discover Bank
| 6 months of interest
|
PenFed Credit Union | 365 days / 30% of dividends
|
Connexus Credit Union | 90 days of dividends |
Sallie Mae | 90 days of interest
|
TIAA Bank
| 25% of total interest |
Live Oak Bank | 90 days of interest |
LendingClub | 100% of total interest |
Ally Bank
| 60 days of interest
|
Marcus | 180 days of interest
|
Merrick Bank | 180 days of interest
|
Citibank | 90 days of interest
|
Pros And Cons Of CDs
CDs have several advantages. They are a safe, government-insured investment with predictable returns and diverse term options. CDs offer steady growth, making them suitable for short-term goals or emergencies.
However, they also have drawbacks. Access to your money before maturity usually results in penalties. CD interest rates are lower than riskier investments like stocks, which can pose an inflation risk.
Additionally, funds are tied up for the CD term, limiting liquidity. Consider these factors when deciding if CDs align with your financial objectives.
Pros | Cons |
|---|---|
Laddering Options | Inflation Risk |
Higher Returns Compared To Other Deposits | Not Flexible |
Secure | Taxable Investment |
Low Minimum |
Early Withdrawal Penalty |
Diversity |
CDs vs High Yield Savings Accounts
CDs and high yield savings accounts (HYSA) differ in key ways:
- CDs have fixed terms, often ranging from months to years, whereas HYSA offers no fixed term, allowing access anytime.
- CDs provide fixed interest rates for the entire term, typically higher than HYSA, which has variable rates based on market conditions.
- CDs limit liquidity by locking funds until maturity, while HYSA maintains higher liquidity, enabling penalty-free withdrawals. Both are generally insured for safety.
- CDs suit long-term savings with limited access, while HYSA is ideal for emergency funds and those needing flexible, immediate access to savings. Your choice hinges on your financial goals, risk tolerance, and flexibility needs.
CDs Main Alternatives
The main alternatives to CDs include:
High-Yield Savings Accounts (HYSA): These savings accounts provide higher interest rates than traditional savings accounts, making them a good option for short-term savings with better returns.
Money Market Accounts (MMAs): MMAs combine features of checking and savings accounts, offering higher interest rates than regular savings accounts. They provide limited check-writing abilities and liquidity.
Government Bonds: Issued by the government, these bonds include Treasury Bonds, Treasury Notes, and Treasury Bills. They are low-risk and offer fixed interest payments, but they may require a longer investment horizon.
Corporate Bonds: These are debt securities issued by corporations. They typically offer higher yields than government bonds but come with slightly higher risk due to the creditworthiness of the issuer.
Stocks and Mutual Funds: These investments offer the potential for higher returns but also carry greater risk. They are better suited for long-term investment goals and may provide dividends or capital appreciation.
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How We Picked The Best CD Rates: Methodology
The Smart Investor team conducted thorough research to uncover the best CD rates available in banks and credit unions. We evaluated them based on four key areas:
Interest Rates and Terms (50%): We analyzed the interest rates offered on CDs with a 3-year term and reviewed any associated terms and conditions. Banks offering higher interest rates and favorable terms, such as low minimum deposits and reasonable penalties for early withdrawal, received higher scores in this category.
CD Features (20%): This category focused on additional features offered by the CDs, including automatic renewal options, choices for receiving interest payments (monthly, quarterly, or at maturity), and eligibility for promotional rates. CDs with extra features or flexibility earned higher ratings.
Customer Experience (20%): We assessed the ease of opening a CD, communication with customer service, and usability of the bank's online banking tools (tested by our team). Banks with streamlined processes, helpful customer service, and user-friendly websites earned higher scores in this category.
Financial Stability and Reputation (10%): We evaluated each bank's financial stability and reputation, considering customer satisfaction ratings, reviews from JD Power, TrustPilot, and their Better Business Bureau (BBB) profile. Banks with strong finances and positive reputations received higher ratings.
We carefully weighed various aspects within each category to ensure a comprehensive evaluation of each CD.
