Deciding where to stick your savings is tricky.
Savings accounts and money market accounts are highly liquid but usually offer a low rate of return.
Long-term CDs usually offer better rates. But unless you’re willing to pay a premium for withdrawing your funds early, they’ll be locked in for years.
An 18-month CD offers the best of both worlds: a higher yield than a standard savings account and a low level of commitment.
Bankrate’s guide to choosing the right CD rate
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Methodology for Bankrate’s Best CD Rates
At Bankrate, we strive to help you make smarter financial decisions. We follow strict guidelines to ensure that our editorial content is unbiased and not influenced by advertisers. Our editorial team receives no direct compensation from advertisers and our content is thoroughly fact-checked to ensure accuracy.
Bankrate regularly surveys around 70 widely available financial institutions, made up of the biggest banks and credit unions, as well as a number of popular online banks.
To find the best CDs, our editorial team analyzes various factors, such as: annual percentage yield (APY), the minimum needed to earn that APY (or to open the CD) and whether or not it is broadly available. All of the accounts on this page are insured by Federal Deposit Insurance Corp. (FDIC) banks or by the National Credit Union Share Insurance Fund (NCUA) at National Credit Union Administration (NCUA) credit unions.
When selecting the best CD for you, consider the purpose of the money and when you’ll need access to these funds to help you avoid early withdrawal penalties.
How does an 18-month CD work?
With a CD, you agree to leave your money in the account for a set period of time — in this case, 18 months. In return for your commitment to leave the money alone, you receive a higher yield from your bank or financial institution.
With an 18-month CD, your interest rate is locked in, so you don’t have to worry about your bank potentially lowering the rate on your account.
An 18-month CD can be ideal for setting aside money for short-term goals, such as going on vacation or saving for a car down payment. You can also use an 18-month CD to build a CD ladder.
Don’t assume that the best 18-month CD rates are found at your current bank. Instead, compare CDs online.
The best 18-month CD rates for January 2021
- SchoolsFirst Federal Credit Union: 0.70% APY; $20,000 minimum deposit
- First Internet Bank of Indiana: 0.65% APY; $1,000 minimum deposit
- Limelight Bank: 0.65% APY; $1,000 minimum deposit
- Ally Bank: 0.60% APY; $0 minimum deposit
- Emigrant Direct: 0.60% APY; $1,000 minimum deposit
- Navy Federal Credit Union: 0.60% APY; $1,000 minimum deposit
- Synchrony Bank: 0.60% APY; $2,000 minimum deposit
- Marcus by Goldman Sachs: 0.55% APY; $500 minimum deposit
- Sallie Mae Bank: 0.55% APY; $2,500 minimum deposit
- Golden 1 Credit Union: 0.50% APY; $500 minimum deposit
- VyStar Credit Union: 0.50% APY; $500 minimum deposit
- Randolph-Brooks Federal Credit Union: 0.50% APY; $1,000 minimum deposit
- Discover Bank: 0.50% APY; $2,500 minimum deposit
Note: The APYs (Annual Percentage Yield) shown are as of Jan. 14, 2021. The APYs for some products may vary by region.
Today’s top widely available 18-month CDs pay 0.70 percent APY. This may be a good place to invest money for short-term financial obligations, like saving up for a down payment on a house.
Finding the best 18-month CD rate
Finding the best 18-month CD may take some time. Besides the interest rate, you’ll need to compare early withdrawal penalties and minimum deposit requirements. Also, find out whether you’ll be responsible for any fees.
Here are the top widely available 18-month CD rates. Compare these offers, then calculate how much interest you would earn when your CD matures.
SchoolsFirst Federal Credit Union – 0.70% APY; $20,000 minimum deposit
SchoolsFirst Federal Credit Union was formed during the Great Depression in 1934. The credit union, created by school employees, has 50 branches.
SchoolsFirst Federal Credit Union has low minimum balances and CD terms from as short as 30 days to as long as five years. The more money you put in your CD, the higher the APY. CDs at this credit union have four balance tiers: $500, $20,000, $50,000 or $100,000.
First Internet Bank of Indiana – 0.65% APY; $1,000 minimum deposit for this APY
First Internet Bank of Indiana was the first FDIC-insured financial institution to operate entirely online, according to the bank’s website. First Internet Bank of Indiana opened in 1999 and is available in all 50 states.
First Internet Bank offers eight terms of CDs, a money market savings account with a competitive yield, a savings account and two checking accounts.
Limelight Bank – 0.65% APY; $1,000 minimum deposit
Limelight Bank is a division of Capital Community Bank. It has its headquarters in Provo, Utah.
Limelight Bank only offers CDs on its website and requires a minimum deposit of $1,000 on all four of its CD terms. You’ll have to look elsewhere if you’re looking for a CD with a term of longer than three years.
Ally Bank – 0.60% APY; $0 minimum deposit
Ally Bank has been around for a little more than 10 years. Ally Bank features low minimum balances and competitive APYs.
Ally Bank’s early withdrawal penalties are less harsh than those that apply at most other banks. For example, the penalty applying to CDs maturing in five years is 150 days of interest (usually it’s equal to at least 180 days of interest).
Emigrant Direct – 0.60% APY; $1,000 minimum deposit
EmigrantDirect is a division of Emigrant Bank.
EmigrantDirect has CDs with terms ranging from 16 months to 10 years. All of these CDs require a $1,000 minimum deposit.
On the savings side, EmigrantDirect has its American Dream Savings Account.That savings account doesn’t have fees or service charges.
Navy Federal Credit Union – 0.60% APY; $1,000 minimum deposit for this APY
Navy Federal Credit Union has more than 9 million members and is the world’s largest credit union. It has a global network of 340 branches. Navy Federal Credit Union has its headquarters in Vienna, Virginia.
Membership at Navy Federal Credit Union is open to all Department of Defense and Coast Guard Active Duty, civilian, contract personnel, veterans and their families.
In addition to CDs, Navy Federal Credit Union also offers checking and savings accounts, loans and credit cards.
Synchrony Bank – 0.60% APY; $2,000 minimum deposit
Synchrony Bank offers competitive yields across 12 terms. All standard CD terms typically offered by banks and credit unions are available.
If Synchrony Bank receives your CD deposit within the 15-day period — and the CD rate increased, you’ll receive this higher rate.
The bank also offers a savings account and a money market account. The savings account has a competitive APY and has no minimum balance requirement.
Marcus by Goldman Sachs – 0.55% APY; $500 minimum deposit
Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA. Marcus offers a variety of CDs, three no-penalty CD terms and a savings account. Marcus also offers lending options with its debt consolidation loans, home improvement loans and personal loans.
Marcus by Goldman Sachs offers competitive yields on its savings accounts and CDs. Savings products from Marcus are provided through Goldman Sachs Bank USA. Marcus made its debut in October 2016 with just unsecured personal loans before it began offering a savings account and CDs under the Marcus by Goldman Sachs brand in November 2017.
Sallie Mae Bank – 0.55% APY; $2,500 minimum deposit
Sallie Mae Bank offers CDs, a savings account, money market account, credit cards and private student loans. Sallie Mae Bank offers competitive yields on both its CDs and its savings deposit accounts.
Sallie Mae Bank was established in 2005 and has its headquarters in Salt Lake City, Utah. In 2014, Sallie Mae became a standalone consumer banking business.
Golden 1 Credit Union – 0.50% APY; $500 minimum deposit
Golden 1 Credit Union has one million members with its main office being located in Sacramento, California. Golden 1 Credit Union has 72 branches in California, and has been around since 1933. Membership to Golden 1 Credit Union is open to all Californians.
Non-Californians can join Golden 1 Credit Union if they are a registered domestic partner or family member of a member. They can also join if they’re a member of one of the select employee groups.
In addition to CDs, Golden 1 Credit Union also offers a money market account, checking and savings accounts. The credit union also has credit cards and loans.
VyStar Credit Union – 0.50% APY; $500 minimum deposit
VyStar Credit Union was founded in 1952. It was originally called Jax Navy Federal Credit Union and it was chartered at Naval Air Station in Jacksonville, Florida.
Membership at VyStar Credit Union is open to anyone who works or lives in the 49 Florida counties or the four Georgia counties listed on its website.
VyStar Credit Union offers 10 CDs terms ranging from three months to five years. It also offers a one-year CD for Kid’s, VyTeen, Bravo and Achieve members only.
Randolph-Brooks Federal Credit Union – 0.50% APY; $1,000 minimum deposit
Randolph-Brooks Federal Credit Union was established in 1952 and has its headquarters in Live Oak, Texas.
Randolph-Brooks Federal Credit Union has more than 55 branches. It has at least one location in Austin, Corpus Christi and San Antonio.
Besides its CDs, it offers a Really Free Checking account that doesn’t require a minimum balance and it doesn’t have a monthly fee.
Discover Bank – 0.50% APY; $2,500 minimum deposit
Discover Bank offers a wide selection of banking products. It has been offering deposit products online since 2007.
This includes 12 CD terms, a money market account, a savings account and a checking account. It also features an 11-month no-penalty CD.
Coronavirus and Your Money
The COVID-19 pandemic is deepening financial hardships for millions of Americans.
While CD rates are not likely to rise in this environment, their stability can offer some comfort to those who still have extra cash on hand. The rate on a CD stays the same during the deposit term and the account holder knows exactly when that term will end. With their locked-in interest rates, CDs are also a great choice to avoid the stock market’s ups and downs.
Can you lose money in a CD?
For the most part, as long as your money is deposited at an insured institution, you won’t lose money. Double-check that your CD is in an FDIC-insured bank or in a National Credit Union Administration (NCUA) credit union. The NCUA manages and operates the National Credit Union Share Insurance Fund (NCUSIF). These entities insure bank deposits against failure, protecting your money for typically up to $250,000.
Because CDs are cash deposit accounts, your principal, or initial deposit amount, is safe. You don’t have to worry about losing money to market crashes, either. However, your account could lose value due to inflation. Depending on the situation, the yield you earn in a CD might not keep up with inflation, resulting in a loss of spending power.
Also, if you withdraw money out of a CD before it matures, you will likely have to pay a fee, such as a few months’ worth of interest.
If you’re looking to protect your principal, though, your money is safe in a CD if you’re within FDIC insurance limits and guidelines.
18-month CD vs. other short-term investments
An 18-month CD is a relatively short-term investment. While your money is locked up for a year and a half, you’ll have access to it — plus interest — when the term expires. When comparing your savings options, it’s important to take into account liquidity as well as yield.
18-month CD vs. 12-month CD
When you get a 12-month CD, you’re likely to see a smaller yield than an 18-month CD. Because a 12-month CD doesn’t lock your money away as long, the yields are often a little lower.
However, with the shorter-term CD, you can access your money six months earlier. So, if you think you want penalty-free access to your money before an 18-month CD matures, it makes sense to take the lower yield in return for slightly better liquidity.
Consider savings accounts with higher yields
You can find high-yield savings accounts that pay rates similar to top-yielding shorter-term CDs, like those with terms of 12-18 months.
However, with a savings account, you have more immediate access to the money, and you typically won’t be penalized for making withdrawals. If you have short-term goals you’re saving for, or if you want a more accessible emergency fund, a savings account can be a smart choice.
Consider money market accounts with high yield
Another possibility, especially if you want check-writing privileges, is a money market account. There are money market accounts with much higher yields than traditional savings accounts, as well as quick, easy access to your money when you need it.
With a top-yielding money market account, you might find a similar yield compared with top-yielding 18-month CDs. However, if you’re looking for penalty-free liquidity and accessibility, a money market account can be a good choice.
When you choose money market or savings accounts, you have to be aware of the fact that your rate could drop at any time. With a CD, you lock in a rate, so you don’t have to worry about falling rates. The flip side, though, is that rates could go up, and if your money is in a CD, you can’t take advantage of the higher rate until after the term expires.
Short vs. long-term CDs
When considering an 18-month CD, compare it to longer-term accounts. There are CDs that will lock up your money for two years or more, but they also pay higher yields.
If you’re willing to avoid touching your money for a longer period of time, you could take advantage of yields that provide you with much better returns than an 18-month CD. In fact, a 5-year CD often has better yields, and your money remains safe.
There are even 10-year CDs, sometimes designed to be held in an IRA, that can provide you with safe yields.
Before making a decision about what type of CD you want, consider your financial needs and situation. Think about when you might need to access the money and weigh it against the yield you receive.
Before taking the plunge
An 18-month CD is a low-risk investment. But before you purchase one, it’s important to know what you’re getting yourself into.
Ask if you’ll have to maintain a certain balance to earn the APY. While you’re at it, find out how often you’ll receive the interest you’re earning from your bank or credit union. That way, it’ll be easier to hit your savings target or another financial goal.
Best 18-month CD rates, January 2021
|Bank||APY||Minimum Deposit for APY|
|SchoolsFirst Federal Credit Union||0.70%||$20,000|
|First Internet Bank of Indiana||0.65%||$1,000|
|Navy Federal Credit Union||0.60%||$1,000|
|Marcus by Goldman Sachs||0.55%||$500|
|Sallie Mae Bank||0.55%||$2,500|
|Golden 1 Credit Union||0.50%||$500|
|VyStar Credit Union||0.50%||$500|
|Randolph-Brooks Federal Credit Union||0.50%||$1,000|
Learn more about other CD terms:
Learn more about CDs:
- What is a certificate of deposit?
- Which CD account is best for you?
- See how CD safety can boost your portfolio returns
Featured photo by Westend61 of Getty Images.