The top 4-year CDs have something in common. They offer:

The Best 4-year CD Rates for October 2019

  1. CommonWealth One Federal Credit Union: 2.91% APY; $1,000 minimum deposit
  2. Hanscom Federal Credit Union: 2.85% APY; $1,000 minimum deposit to open
  3. United States Senate Federal Credit Union: 2.79% APY; $20,000 deposit to earn APY
  4. Affinity Plus Federal Credit Union: 2.75% APY; $500 minimum deposit
  5. State Department Federal Credit Union: 2.73% APY; $500 minimum deposit

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

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 2.5 times the national average of 1.04 percent APY, according to Bankrate’s most recent national survey of banks and thrifts.

Today’s top nationally available 4-year CDs pay 2.91 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 purchase a CD.

Who is a 4-year CD for?

A 4-year CD is good for someone who wants to earn a fixed APY on their 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 an 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 an 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.

Best 4-year CD details

CommonWealth One Federal Credit Union

The credit union is based in Alexandria, Virginia and was chartered in 1944 as Army Air Force Annex #1 Credit Union. Back then, there were only 94 members. Today, there are more than 32,600 members and anyone can join by becoming a lifetime member of the Virginia Consumer Council.

Hanscom Federal Credit Union

Founded in 1953 with headquarters at Hanscom Air Force Base in Massachusetts. Anyone can become a member by joining the Nashua River Watershed Association for a $35 membership fee.

United States Senate Federal Credit Union

Founded in 1935 and formerly known as the United States Senate Employees Federal Credit Union, it currently serves employees of several government bodies, select employer groups and anyone who donates $8 to the American Consumer Council, Virginia Chapter, or $50 to the U.S. Capitol Historical Society.

Affinity Plus Federal Credit Union

Founded in 1934 and based in Saint Paul, Minnesota. Membership is open to anyone who makes a one-time $25 donation to the Affinity Plus Foundation, which supports financial education across the state.

State Department Federal Credit Union

Based in Alexandria, Virginia, State Department Federal Credit Union was founded in 1935 and was originally named U.S. Department of State Employees Federal Credit Union. Today it serves more than 84,000 members worldwide.

Pros and cons of a 4-year CD

Pros of a 4-year CD

  • Earn a fixed APY on your money.
  • If your CD is in an account at an FDIC bank or in a CD at an NCUA credit union – and within previously mentioned insurance guidelines – then 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 – if the rest is exposed to market volatility or has a possible loss of principal.

Cons of a 4-year CD

  • A 4-year CD may be a little 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 may not be aggressive enough for you – depending on your time horizon and risk tolerance.

Factor in flexibility

Since the Federal Reserve isn’t expecting to raise its benchmark interest rate again in 2019 and in fact moved to lower it at its July meeting, investing in a long-term CD may not seem like the best idea. In fact, banks and credit unions may slowly reduce their rates.

A typical CD comes with an early withdrawal penalty of six months’ interest. Looking for a deal that isn’t too expensive to exit may be worth it, especially if you may ditch your 4-year CD 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 the best 4-year CD rates

Institution APY Minimum deposit
Commonwealth One FCU 2.91% $1,000
Hanscom Federal Credit Union 2.85% $1,000
United States Senate Federal Credit Union 2.79% $20,000
Affinity Plus Federal Credit Union 2.75% $500
State Department Federal Credit Union 2.73% $500