Best 4-year CD rates — April 2020

Saturday, April 04, 2020

The top 4-year CDs have something in common. They offer savers a higher yield than savings accounts and money market accounts. Combine that with a guaranteed rate of return and safety (when you choose a federally-insured account) and these investments may be worth your consideration.

Finding the best 4-year CD rates will require some research. Comparing deals offered by online financial institutions is a good place to start. The best 4-year CDs pay more than twice the national average of 0.64 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.

Today’s top widely available 4-year CDs pay around 2.25 percent APY. This may be a good place to invest for long-term financial obligations, like starting a business.

As you compare rates, pay attention to details. An account that doesn’t require you to fork over too much money upfront is ideal. Consider finding offers that don’t force you to jump through extra hoops — such as opening a new checking account — before you can open a CD.

Best 4-year CD rates for April 2020

Note: The APYs (Annual Percentage Yield) shown are as of April 2, 2020. The APYs for some products may vary by region.

These are the top widely available 4-year CD rates. Evaluate the offers, then calculate how much interest you would earn when your CD matures.

Compare: Best 4-year CD rates for April 2020

American Express National Bank - 1.95% APY; $0 minimum deposit

American Express is well-known for its credit cards and it’s also one of the leaders in the online banking space. But it also offers a competitive yield on some of its CDs and its savings account.

It also doesn’t require a minimum balance, so it may be a good fit for both new and experienced savers.

Barclays Bank - 1.85% APY; no minimum deposit

Barclays Bank doesn’t have minimum balance requirements to open its CDs and savings account. That means it’s an option for savers of all levels. The bank offers nine CD terms. Barclays also offers a savings account, which has a competitive APY.

Banks tend to have a 10-day grace period when your CD matures. But at Barclays, you have a 14-day grace period to withdraw your money without being penalized.

Marcus by Goldman Sachs – 1.85% 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 by Goldman Sachs now has an app available on iOS and one coming to Google Play this spring, according to Marcus’ website.

The online bank has a wide variety of CDs. This includes nine regular term CDs and three no-penalty CDs. Marcus added a no-penalty CD to its lineup in November 2018.

Discover Bank - 1.80% APY; $2,500 minimum deposit

Discover Bank may be known for its credit cards. But it also offers a wide selection of banking products. It has been offering deposit products online since 2007.

Discover Bank offers CDs ranging in terms as short as three months and up to 10 years. It also offers a checking account, money market account and a savings account.

Randolph-Brooks Federal Credit Union - 1.77% APY; $1,000 minimum deposit

Randolph-Brooks Federal Credit Union has more than 55 branches. It has at least one location in Austin, Corpus Christi and San Antonio.

Randolph-Brooks Federal Credit Union was established in 1952 and has its headquarters in Live Oak, Texas.

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.

Navy Federal Credit Union -  1.76% APY; $1,000 minimum deposit

Navy Federal Credit Union has a global network of 340 branches and was established in 1933. 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.

Comenity Direct - 1.75% APY; $1,500 minimum deposit

Comenity Direct launched in April 2019. It's an online-only bank that offers high-yield savings products and CDs. Comenity Direct offers five terms of CDs.

Comenity Direct is a brand of Comenity Capital Bank. Comenity Capital Bank is a brand that’s existed for around 30 years. Comenity is a bank behind many branded credit cards.

Who is a 4-year CD good for?

A 4-year CD is good for someone who wants to earn a certain amount of money. This is a product to consider if this is long-term money that you don’t want exposed to volatility. Money invested in the stock market would be an example of funds that are subject to volatility and uncertainty – and a possible risk of principal.

So, a 4-year CD can be a good option if you value safety and don’t want surprises – since you’ll earn a fixed APY. Your CD is protected if it’s in a 4-year CD at an FDIC-insured bank or in a 4-year CD at a National Credit Union Administration (NCUA) credit union. FDIC banks and NCUA credit unions are both backed by the full faith and credit of the U.S. government. But there are limits to the insurance. Each depositor at an FDIC bank is insured to at least $250,000 per insured bank, according to the FDIC. The standard share insurance amount at an NCUA credit union is $250,000 per share owner, per insured credit union, for each ownership category at an NCUA credit union, according to the NCUA.

Why get a 4-year CD?

Get a 4-year CD if you have money that you’re looking to grow for more than four years. Generally, if you withdraw your money from the CD before the CD matures in four years, you’ll incur an early withdrawal penalty. If applicable, this will take away from your interest earnings.

You should get a 4-year CD if you want an APY that’s potentially higher than savings accounts and money market accounts. If you feel as if APYs will be stagnant or decreasing in the near future, then a 4-year CD is a way to earn an APY that is currently beating the inflation rate.

4-year CD yields offered by popular banks – April 2020

TIAA Bank – 1.65% APY; $5,000 minimum deposit

TIAA Bank is a division of TIAA, FSB. TIAA Bank has 10 financial centers, all located in Florida.

Besides its Yield Pledge CDs, TIAA Bank also offers a Yield Pledge Checking account, a Yield Pledge Money Market and other products. TIAA Bank’s CDs require $5,000 to open one. TIAA Bank also offers IRA-eligible CDs.

Synchrony Bank - 1.60% APY; $2,000 minimum deposit

Synchrony Bank offers 12 CD terms with competitive yields. But there are higher APYs available at other banks. Synchrony Bank also offers a savings account and a money market account.

The bank is an online-only financial institution that’s part of a company that also issues credit cards. The bank’s relatively new mobile app makes it possible to transfer funds and check account balances at any time from anywhere.

Citizens Access - 1.60% APY; $5,000 minimum deposit

Citizens Access launched in July 2018. It made its debut with a savings account and CDs. And then in November 2019 it added an 11-month liquid CD and stopped offering the six and 18-month CDs.

The bank offers a competitive yield on its CDs and savings account. All of its products require a $5,000 minimum deposit.

You need to deposit at least $5,000 into your CD within 30 days of account opening.

CIT Bank – 1.50% APY; $1,000 minimum deposit

CIT Bank is CIT’s national direct bank. CIT Bank, N.A. is a subsidiary of CIT Group Inc.

CIT Bank offers eight terms of CDs, four terms of jumbo CDs and an 11-month no-penalty CD.

In addition to its CDs, CIT Bank offers two savings accounts and a money market account. CIT Bank also launched its eChecking account in November 2019.

Live Oak Bank – 1.50% APY; $2,500 minimum deposit

Live Oak Bank has been around since 2008. Live Oak Bank, which has its headquarters in Wilmington, North Carolina, offers a savings account and seven terms of CDs.

Live Oak Bank offers a variety of savings products with competitive APYs. There are some banks with lower opening deposit requirements. However, Live Oak Bank can be a good option if you have at least $2,500 for the minimum deposit to open this CD.

Pros and cons of a 4-year CD

Pros of a 4-year CD

  • Earn a fixed APY.
  • If your account is insured by the FDIC or the NCUA – and you're within the previously mentioned insurance guidelines – your money will be backed by the full faith and credit of the U.S. government.
  • You’d lock in an APY that’s ahead of the current inflation rate.
  • If APYs end up decreasing, you’d be locked in for the next few years.
  • A 4-year CD could help you diversify some of your savings/investments.

Cons of a 4-year CD

  • A 4-year CD may be long-term for a CD at this point – especially if APYs start increasing dramatically.
  • If you need to make a withdrawal, generally, you’ll incur a penalty for that early withdrawal.
  • A 4-year CD might not keep up with inflation over time, causing your money to lose purchasing power.

Factor in flexibility

The Federal Reserve lowered interest rates three times in 2019 and there were a pair of emergency cuts in March 2020. The future is uncertain and CD rates are likely to decrease in the near future.

A typical CD has an early withdrawal penalty. If your investment strategy calls for putting your money into a 4-year CD, consider looking for a deal that isn't too expensive to exit, especially if you may ditch your account before it matures. Another option is to look for institutions giving savers a one-time rate increase over the course of their terms.

To recap, see below for the best 4-year CD rates

Institution APY Minimum deposit
American Express National Bank 1.95% $0
Barclays Bank 1.85% $0
Marcus by Goldman Sachs 1.85% $500
Discover Bank 1.80% $2,500
Randolph-Brooks Federal Credit Union 1.77% $1,000
Navy Federal Credit Union 1.76% $1,000
Comenity Direct 1.75% $1,500

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