Summary of best 5-year CD rates for December 2019

Bank APY Minimum Deposit
Lafayette Federal Credit Union 3.03% $500
Pen Air Federal Credit Union 2.95% $500
State Department Federal Credit Union 2.88% $500
DollarSavingsDirect 2.80% $1,000
Dover Federal Credit Union 2.80% $25,000

A certificate of deposit, or CD, is an account that allows you to stash away some cash and earn fixed interest on it for a set period of time.

A 5-year CD can get you one of the highest savings rates while offering safety and a guaranteed return. In exchange for handing over your money for a longer term, banks are usually willing to offer you a higher interest rate. However, with the uncertainty over the future direction of interest rates — the Federal Reserve recently cut rates again — it makes figuring out where to park your cash a hard decision.

Although average 5-year CD rates are hovering around 1.10 percent, we’ve shopped around to find the top nationally available CDs for you. Compare these offers, then calculate how much interest you would earn when your CD matures.

Finding the best 5-year CD rates

Savers looking for the best CD rates probably want to venture online. Even if a bank is relatively small or not well-known, as long as it’s a member of the Federal Deposit Insurance Corp. (FDIC), you can rest easy knowing your deposits will be returned. The same goes for credit unions backed by the National Credit Union Administration (NCUA).

One thing to look for, though: ease of use. Banks that make it difficult or time-consuming to deposit and withdraw funds may waste so much of your time that it outweighs the benefit of a few extra basis points of interest on your savings.

[READ: Best banks and credit unions for mobile banking]

Compare: Best 5-year CD rates for December 2019

Best Overall: Lafayette Federal Credit Union – 3.03% APY, $500 minimum deposit

This credit union’s high APY and low minimum deposit make it today’s best option for consumers nationwide who are looking for a high-yield long-term CD. Few 5-year CDs still offer a 3 percent yield. Other terms offered by the credit union include fixed-rate share certificates ranging from seven months to four years and a few variable-rate certificates.

Lafayette Federal Credit Union was founded in 1935. It’s based in the Washington, D.C. area and is headquartered in Kensington, Maryland. For those who don’t meet any of the following qualifications (having an immediate family member who’s a member; being a resident of Maryland, Virginia or Washington, D.C.; becoming a member of the American Consumer Council; living, working or worshiping in the D.C. area; or working for a certain company), you can also join the credit union through the Home Ownership Financial Literacy Council.

Runner-up: Pen Air Federal Credit Union – 2.95% APY, $500 minimum deposit

For months, Pen Air Federal Credit Union has offered members the chance to earn close to 3 percent APY without having to cough up too much cash. It has also made this deal accessible to just about everyone nationwide. There are multiple ways to join the credit union and one method involves joining through the Friends of the Navy-Marine Corps Relief Society and offering a $3 donation.

Pen Air Federal Credit Union, which was founded in 1904, is headquartered in Pensacola, Florida. Members have access to savings and money market accounts and a program called Round It. Debit card transactions are rounded to the next dollar, allowing funds to be swept into a special savings account.

High Rate: State Department Federal Credit Union – 2.98% APY, $500 minimum deposit

Members of the State Department Federal Credit Union who opt for a share certificate can earn a high yield without locking up too much cash at one time. Just $500 is needed to earn nearly 3 percent APY.

Share certificate terms at the credit union range from six months to five years. There are also jumbo certificates available across various terms and bump-up certificates that allow savers to raise their APY before their certificate comes due. There are no service charges that apply and interest is compounded daily for most of the certificates. For the bump-up share certificates, dividends are compounded and credited quarterly if the term is 12 months or longer. Otherwise, dividends are paid at maturity.

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.

High Rate: DollarSavingsDirect – 2.80% APY, $1,000 minimum deposit

DollarSavingsDirect is ideal for savers looking for a no-frills account and a chance to earn a competitive yield.

The online-only bank offers a handful of CDs across different terms, including one for five years. The minimum opening deposits for all of its products are relatively low. Interest is compounded daily and credited monthly. Accounts can be managed online, but there is no mobile app for consumers looking to quickly access their accounts on the go.

DollarSavingsDirect is an online division of Emigrant Bank, a New York-based financial institution that has been around for more than a century.

High Rate: Dover Federal Credit Union – 2.80% APY, $25,000 minimum deposit

Dover Federal Credit Union offers one of the highest 5-year CD rates available across the country. A minimum of $500 is needed to open a share certificate, but the higher your deposit, the higher your interest rate. With a $25,000 deposit, for example, you can earn 2.8 percent APY.

Dover Federal Credit Union was chartered in 1958 by military and civilian workers at Dover Air Force Base in Delaware. Membership is open to anyone who joins the Friends of Bombay Hook. Yields vary depending on how much money you’re willing to set aside. Members interested in a jumbo certificate have the opportunity to earn an extra five to 10 basis points (a basis point is one-hundredth of a percentage point).

5-year CD yields offered by popular banks – December 2019

Best for Low Early Withdrawal Penalty: Ally Bank – 2.25% APY, no minimum deposit

Ally Bank is an online-only bank that has been around for a little more than 10 years. Its CDs have competitive APYs and few require a minimum deposit.

The bank offers several different types of CDs. In addition to its standard CDs, it has a raise your rate CD and a no-penalty CD. The raise your rate CD allows the interest rate to increase once with the two-year CD or twice with the four-year CD if the balance tier increases on your CD.

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).

Best for Offering CDs Across Terms: Synchrony Bank – 2.25% 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. 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.

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.

Best for Flexible Interest Payment Options: Citizens Access – 2.25% 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. Interest payment options are flexible, meaning customers can have interest credited to the principal balance of the CD or transferred to another account, without penalty, before the CD matures.

Citizens Access is a direct bank offering savings products and the new online division of Citizens Bank.

Best for Competitive Yield for Super Savers: PurePoint Financial – 2.25% APY, $10,000 minimum deposit

PurePoint Financial is a division of MUFG Union Bank. It offers nine regular CD terms and three terms for its no-penalty CDs. It also offers an online savings account with a competitive yield.

All of PurePoint Financial’s products have one thing in common: they require a $10,000 minimum deposit to open. So these accounts aren’t a good fit if you’re not ready to deposit that much.

Best for No Minimum Balance Requirement: Barclays Bank – 2.10% APY

Barclays Bank doesn’t have minimum balance requirements to open its CDs and savings account. That means it’s an option for savers across all income levels. The bank offers nine CD terms. It has competitive yields, but it doesn’t tend to offer the highest available APY. Barclays also offers a savings account, which has a competitive APY.

The bank is headquartered in the U.K. and has a global presence. In the U.S., its products are limited, but the bank overall rates well for its lack of monthly fees and deposit products.

Pros and cons of 5-year CDs

Before getting a 5-year CD, consider the pros and cons to see if it’s the right fit for you.


  • Limited liquidity. This can be a benefit to those who might be tempted to spend their savings. “Not only will you earn interest on your account, but there’s also a psychological advantage to placing money in a CD rather than in an easily accessed savings account,” says Logan Allec, a CPA and owner of personal finance site Money Done Right.
  • Safety. CDs from federally insured banks and credit unions are backed by the U.S. government up to $250,000 — meaning your investment is ultra-secure.
  • High returns. Banks are generally willing to provide a higher interest rate than you could find in a traditional savings account or a CD with a shorter maturity.
  • Wide selection. You can choose from thousands of banks and credit unions to find a CD with the interest rate, maturity date and terms that fit your needs.
  • Fixed, predictable returns. Once you put your money in a CD, you’re guaranteed a set return at a specified date — which can help you plan your financial goals.


  • Limited liquidity. Although a pro for some savers, this is a drawback for those who need to access their funds before the CD’s term is up. You’ll typically have to pay a penalty for making early withdrawals.
  • Inflation risk. The money in your CD may lose its purchasing power over time, as inflation overtakes your interest gains.
  • Low relative returns. “While the money in your CD is generally [more stable] than money invested in the stock market, you may not earn as much with your CD as you would in the market,” Allec says. “A low-risk investment, like a CD, brings you a lower return.”
  • Reinvestment risk. When you park your money in a 5-year CD, it’s a long wait before you can tap those funds. If interest rates rise in the meantime, you’ll miss out on investing in a higher-rate CD.

Alternatives to 5-year CDs

  • CDs with a shorter maturity: These allow you to earn interest and potentially take advantage of rising rates once they mature. Check out 1-year and 18-month CDs if you don’t want to lock away your money for five years.
  • Savings accounts: These offer total liquidity, so you can get your hands on your money as soon as you need it and pay no penalties. Traditional savings accounts may come with a lower interest rate than CDs, but “if you are comfortable putting your money into an online bank, you may be able to find some interest rates that could come close to that of a 5-year CD,” Allec says.
  • Money market accounts: These accounts allow you to access your money (with no penalties) while still providing a higher return than most savings accounts. To open a money market account, many institutions require a relatively high minimum balance—but that can also mean getting a higher interest rate.
  • Bonds: If you’re interested in taking a bigger risk, you may consider investing in bonds. There are many types available, including municipal, corporate and agency bonds.

5-year CD FAQs

Who should open a 5-year CD?

The Federal Reserve recently cut interest rates for the third time in 2019. CD rates, which have been falling all year long, are likely to continue to fall. Long-term investment vehicles like 5-year CDs technically offer a higher yield than their shorter-term counterparts. But due to the flat yield curve, you won’t be earning much extra interest by opting for a long-term CD over a mid-term account.

A 5-year CD is best for retirees and savers who don’t need access to a portion of their funds for half a decade. It all depends on your time horizon and financial goals. A 5-year CD could also be a good addition to a CD ladder for savers who want to take advantage of the opportunity to earn a higher yield but still want liquidity and access to cash at set intervals.

Why should I get a 5-year CD?

You should get a 5-year CD if you want some of the best CD yields available. Usually, the longer the time horizon, the higher the APY is on a CD. If you’re satisfied with the APY on the 5-year CD and like to know that you have a certain amount of money at a fixed rate for the next five years, a 5-year CD may be a good option for you.

A 5-year CD could also be a part of a CD ladder, which contains shorter-term CDs. For instance, a 1-year, 2-year, 3-year, 4-year and a 5-year CD could be a part of a ladder that staggers maturities and APYs.

Is a 5-year CD versatile?

With a 5-year CD, savers earn a premium in addition to the normal risk-free rate they get on a conventional savings account. The catch, of course, is that you’ll pay a penalty if you try to withdraw your money.

But assuming you can find a CD with a low penalty of just a few months’ interest, higher interest rates offered on 5-year CDs may make them a good pick over shorter maturities, even if you think you might need to cash in the CD early.

Is a 5-year CD worth it?

There are two factors that determine whether a 5-year CD makes sense for you: your time horizon for this money and whether you’re getting a competitive annual percentage yield (APY).

The length of time is important because you want to make sure that you don’t incur an early withdrawal penalty. You also want to be aware of inflation and try to have a CD that is earning a yield that can keep up.

Can a 5-year CD lose value?

A 5-year CD could lose value if you incur an early-withdrawal penalty. That fee could eat into your principal amount. But if you keep the 5-year CD for the full term, you will earn the stated interest – assuming the product you’re in is a fixed-rate CD.

Each depositor is insured to at least $250,000 per FDIC-insured bank by the FDIC. The standard share insurance amount is $250,000 per share owner, per insured credit union, for each ownership category at National Credit Union Association (NCUA) institutions.

Bankrate’s best 5-year CD rates December 2019

  • Best Overall: Lafayette Federal Credit Union: 3.03% APY
  • Runner-up: Pen Air Federal Credit Union: 2.95% APY
  • High Rate: State Department Federal Credit Union: 2.88% APY
  • High Rate: DollarSavingsDirect: 2.80% APY
  • High Rate: Dover Federal Credit Union: 2.80% APY

Learn more about other CD terms:

Learn more about CDs:

— Bankrate’s Matthew Goldberg also contributed to the update of this story.