Short-term CDs are an ideal choice for individuals seeking to maximize returns within a shorter time frame, making them perfect for emergency funds, upcoming expenses, or those who need may need the money soon.
In this article, we explore some of the top options available in the market, highlighting financial institutions offering competitive rates and flexible terms for CDs with a maturity of up to 12 months.
Live Oak 9-Month CD
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Established in 2008, Live Oak Bank has emerged as a leading fully online financial institution. With Live Oak Bank CDs, you have the flexibility to choose from a range of terms spanning from six months to five years, ensuring that you can secure a favorable interest rate throughout the entire duration.
What's more, you won't have to worry about any monthly maintenance fees, and your interest can be conveniently disbursed on a monthly basis through automatic payments. Regardless of the CD term you select, there is a minimum deposit requirement of $2,500.
At maturity, the CD will automatically renew, but you'll have a generous 10-day grace period during which you can make withdrawals, modify your account, or even opt to close it entirely.
CIT Bank 6-Month CD
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
CIT Bank, an entirely digital and online financial institution, provides a range of banking and lending products, including CDs. Their primary CD offering, known as the Term CD, comes in various terms ranging from six months to five years.
The 6-month CD rate offered by CIT Bank is highly appealing. The current rates for their Term CDs vary and can be found at 0.30% – 3.50%. Additionally, CIT Bank offers an 11-month no penalty CD with a current rate of 3.50%.
As a division of First Citizens Bank, CIT Bank benefits from a rich and prestigious banking heritage. Opening a CIT CD account is done entirely online.
Popular Direct 6-Month CD
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Popular Direct stands out among financial institutions, including both online banks and credit unions, by offering highly competitive Annual Percentage Yields (APYs). They provide a wide selection of CDs with varying terms to accommodate different preferences, ranging from short-term options to long-term commitments like the 60-month CD.
The 12-month CD in particular boasts the highest APY, while the 60-month CD also offers attractive rates. To open a CD account with Popular Direct, a minimum deposit is required, which is set at $10,000 regardless of the chosen term.
Operating exclusively online, Popular Direct functions as a subsidiary of Popular Bank, a comprehensive financial services provider with a rich history dating back to 1893.
NASA Federal Credit Union 9-Month Certificate
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
NASA Federal offers a range of CDs or Share Certificates to choose from. The APY rates for these certificates fluctuate depending on the term, ranging from 3.69% – 4.88%. To initiate a standard CD, a minimum deposit of $1,000 is required. Notably, the 9-month term option boasts some of the most competitive rates available in the market.
The eligibility criteria for NASA Federal Credit Union membership include employees/retirees of NASA, its centers/facilities, or the National Academy of Sciences, as well as employees/members of partner companies/associations, and relatives/household members of current credit union members.
If an individual does not fall into any of the above categories, they can still receive membership benefits by obtaining a complimentary one-year affiliated membership to the National Space Society (NSS). This affiliated membership grants them full NASA Federal membership benefits.
Synchrony Bank 6-Month CD
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Synchrony Bank, an online financial institution, provides various financial services, including CDs, with flexible terms spanning three months to five years.
Currently, Synchrony Bank offers highly competitive rates for their 6-month CDs, surpassing many others nationwide. If the flexibility to access your funds during the CD term is a concern, Synchrony's no-penalty CD is ideal. This CD option has an 11-month term and does not require a minimum balance.
Upon maturity, CDs with Synchrony Bank automatically renew. However, customers are granted a 10-day grace period to explore other possibilities, such as adding or withdrawing funds, modifying the CD term, or closing the CD account.
Connexus Credit Union 12-Month Certificate
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Connexus Credit Union offers a range of CDs or Share certificates with different terms, spanning from 12 months – 5 years. Among them, the 12-month CD stands out with competitive rates, and there is an additional rate bonus for deposits exceeding $100,000. Additionally, Connexus offers a Bump Up CD with a 24-month term, allowing you the flexibility to increase your rate once during the term.
To join Connexus Credit Union, you have several options available. If you are an employee, retiree, or former employee of a specific employer group, you can select that option. Alternatively, if you reside, are employed, or a student in certain communities, you can choose the appropriate option. Additionally, if you are a spouse, family member, or live in the same household as an existing member, select that option.
If you are affiliated with Northcentral Technical College as a student, employee, alumni, or family member, you can select that option as well. If none of the above options apply to you, you can still join by making a one-time $5 donation to the Connexus Association for charitable giving purposes during the application process.
Bread Financial 12-Month CD
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Bread Financial provides a range of CDs with flexible terms spanning from one to five years, allowing you to select the duration that fits your requirements. The 12-month CD stands out with an appealing rate compared to many banks and credit unions.
Regardless of the chosen term, there is a minimum deposit requirement of $1,500. These CDs earn interest that compounds daily and is credited monthly. Notably, there are no maintenance fees, and online statements are provided free of charge. However, if you withdraw funds before the CD reaches maturity, early withdrawal fees apply.
The penalty duration varies, ranging from 90 days of simple interest for terms less than one year to 365 days for terms of four or five years. After maturity, there is a 10-day grace period for cashing out or making changes; otherwise, the CD will automatically renew.
Alliant Credit Union 12-Month Certificate
APY
Minimum Deposit
Early Withdrawal Penalty
Other Terms
Alliant Credit Union offers highly competitive rates for their certificates, with their 12-month certificate rates being among the highest in the United States, including a reasonable early withdrawal fee. Their rates remain nationally competitive across various available terms.
When it comes to long-term certificates, Alliant Credit Union continues to provide favorable rates compared to other financial institutions. Additionally, individuals with deposits exceeding $75,000 have the opportunity to open a jumbo certificate.
To open an Alliant certificate account, you have three options. Existing Alliant members can log in to their online banking account, navigate to “Open a New Account” in the left sidebar, and follow the prompts. New members can initiate the membership application process online and choose “Certificates” as the desired account type.
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Why Short Term CDs Are Attractive These Days?
In contrast to previous years, the current economic climate is characterized by a notable increase in interest rates, presenting investors with highly attractive rates on short-term, secure investment options such as CDs. While the long-term projection for interest rates remains uncertain, long-term CDs offer lower yields than their short-term counterparts.
Consequently, numerous investors are convinced that this is an opportune moment to capitalize on these unusually high rates, which have not been witnessed in the realm of short-term deposits for over 15 years.
As exemplified above, many investors can now secure an annual percentage yield (APY) exceeding 5%, which, depending on the amount deposited, can translate into substantial financial gains in the future, potentially amounting to thousands of dollars.
FAQs
What happens if I forget about my short-term CD after it matures?
If you fail to take action after your short-term CD matures during the grace period, most financial institutions may automatically renew it for another term at the prevailing interest rate.
Are short-term CDs a good option for emergency funds?
Short-term CDs can be suitable for emergency funds as they offer a fixed return and provide easy access to funds once they mature, but be mindful of potential early withdrawal penalties.
Are short-term CDs safe?
Short-term CDs are considered safe because they are typically insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor.
What is the advantage of a short-term CD?
Short-term CDs offer higher interest rates compared to traditional savings accounts, allowing you to earn more on your money within a shorter time frame.
