Anytime you deposit into a CD, you promise to leave the money there for a set period of time. When you get a 6-month CD, the money remains in the deposit account for six months. Because you’re willing to lock the money away, a bank might be willing to pay you a higher yield on the money.

If you want to know how much interest you could earn on a 6-month CD, try Bankrate’s calculator, which is designed to help you estimate potential earnings. Six months may not be a long time, but it can be useful when it comes to staying on track with your savings goals or setting up an emergency savings ladder.

Best 6-month CD rates:

Above are the top nationally available 6-month CD rates. Compare these offers, then calculate how much interest you would earn when your CD matures.

Savers looking to get a little extra boost and lock in a yield for a set period of time often look into certificates of deposit (CDs). A CD can help you work toward your savings goals, whether they’re long-term or short-term.

In general, CD yields are based on the federal funds rate set by the Federal Reserve. However, once you lock in a yield, you can expect it to be consistent for the entire term of the CD — even if rates fall.

Here’s what you need to know about using a 6-month CD to your advantage.

Finding the best 6-month CD rates

To find the best 6-month CD rates, savers need to answer two questions:

  • How much yield can I reasonably expect to earn?
  • What direction are interest rates headed?

Rates are stabilizing. If you’re looking for a short-term CD, it’s best to shop around for the best CD rates.

The lower the CD term length, the less interest you can expect to earn. To find the best 6-month CD rates, evaluate offers from online banks and credit unions. Try to avoid accounts with high fees and minimum deposit requirements.

Who should open a 6-month CD?

Six months is one of the shortest terms available for savers interested in CDs. It’s a product that’s best for consumers with specific short-term goals who are looking for a temporary place to keep money that will be used soon for a specific purpose, like funds for an upcoming wedding, vacation or home down payment. A six-month CD could also be a place to keep cash that you’re hoping to put into a riskier investment vehicle.

The longer the term of your CD, the higher the yield you’ll likely have at your disposal. That means 6-month CD yields are typically relatively low. Consider whether it makes more sense to keep your money in a more liquid account, like a savings or money market account. That way, you won’t run the risk of losing interest if you need the money you stashed away before the six month time clock runs out.

Compare: Best 6-month CD rates for January 2020

CommunityWide Federal Credit Union: 2.05% APY, $1,000 minimum deposit

We consider CommunityWide Federal Credit Union to have one of the best rates because of its high yield and relatively low minimum deposit ($1,000). The credit union offers CDs across most standard terms ranging from six months to five years. Certificates do not automatically renew at the end of the term. According to their website, for an early withdrawal, the penalty is equal to the amount of the withdrawal times the remaining days of the term at the rate of twice the current APR paid on the certificate.

CommunityWide Federal Credit Union was established in 1967 as the West Washington Association Federal Credit Union. Its purpose was to provide services to people of modest means in South Bend, Indiana, where it is currently based. With 11 offices in the Michigan area, the credit union offers its products nationwide. Membership is open to employees, retirees or donor members of dozens of organizations. You can also qualify for membership by joining a group like Habitat for Humanity Helpers.

Bellco Credit Union: 2.00% APY, $500 minimum deposit

Bellco offers regular CDs with terms spanning from three months to five years requiring a $500 opening account balance, as well as so-called Smart Move CDs ranging from 18 months to three years with a $2,500 balance requirement. Jumbo CDs come in terms of 6 and 12 months.

Founded in 1936, Bellco Credit Union is based in Greenwood Village, Colorado and serves more than 338,000 members. Colorado residents can join the credit union by becoming a member of the Consumers United Association. Membership is open nationwide to anyone who joins the Bellco Foundation for a $10 minimum donation.

HSBC Direct: 2.00% APY, $1,000 minimum deposit

HSBC Direct is an online division of the HSBC Group, which operates through a network of affiliates and subsidiaries and serves more than 39 million customers worldwide. The rates offered by the online division outshine those offered by its parent company.

Originally named Hongkong and Shanghai Banking Corporation, HSBC was established in 1865 to finance trade between Europe, India and China.

Nationwide by Axos Bank: 1.95% APY, $500 minimum deposit

Nationwide Bank customers have been transitioned to Axos Bank. CDs are available across every standard term and the minimum deposit is relatively low.

Axos Bank, a federally chartered savings bank, offers a broad range of financial products. This includes checking, savings, money market accounts, CDs, mortgages, and personal loans.

Luther Burbank Savings: 1.95% APY, $10,000 minimum deposit

Customers of Luther Burbank Savings have the option of applying for standard CDs across terms ranging from three months to five years. Special CDs are also available, including a six month deal that puts the bank on the list of institutions offering the top 6-month CD rates.

Luther Burbank Savings offers business and personal accounts, including multiple checking products and a high-end money market account. The bank, which is based in California, is a privately-owned institution founded in 1983.

6-month CD rates offered by popular banks – January 2020

Investors eAccess: 1.80% APY, $500 minimum deposit

The 6-month CD offered by Investors eAccess is a steal. Not only is the bank paying a fairly competitive rate, but the account is also a no-penalty CD. Beginning seven days after the account is funded, you can withdraw your savings at any time without facing an early withdrawal penalty. Plus, the minimum deposit to open the account is low.

Investors eAccess launched two CDs in 2019. It also offers a money market account. Investors eAccess is a trade name of Investors Bank. Investors Bank has 147 branches in New Jersey and New York.

PurePoint Financial: 1.70% 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.

Ally Bank: 1.00% 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.

Synchrony Bank: 1.00% 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.

CIT Bank: 0.72% APY, $1,000 minimum deposit

CIT Bank is CIT’s online bank. CIT offers eight regular CDs with various terms. It also has an 11-month no penalty CD, jumbo CDs and a checking account that launched in November 2019.

You need at least $1,000 to open a CIT Bank term CD. The CIT Savings Builder, a savings account, either has a $25,000 minimum balance or you can make a monthly deposit of at least $100.

Comparing 6-month CDs vs. other savings vehicles

When considering a 6-month CD, it’s a good idea to compare it to other available accounts and understand when it might be the right choice for you — and when other options might turn out to be a better decision.

6-month CD vs. savings account

Because you’re willing to keep your money in a CD for a set period of time, you usually end up with a higher rate with a CD than a savings account. In fact, you might have a rate that is up to 10 basis points higher on a 6-month CD than on a savings account.

However, savings accounts are easier to access as needed. With a savings account, you won’t face the early withdrawal penalty that comes with tapping your 6-month CD before it matures.

6-month CD vs. money market account

There’s a good chance you’ll get a better yield on a 6-month CD than on a money market account. So, if you’re looking for a better yield in a safe account, it can make sense to use a CD instead of a money market account.

On the other hand, a money market account is much more accessible than a 6-month CD. You might even be able to use a debit card to access the funds in the money market account — something you can’t do with a CD.

6-month CD vs. 1-year CD vs. 5-year CD

Better yields are generally available on CDs with longer maturities. So, if you’re willing to lock up your money for a year — or even up to five years — you could receive a better rate.

However, the advantage of a 6-month CD is that you know you’ll be able to access the money in a shorter time frame. Because a CD typically comes with an early withdrawal penalty, you have to be willing to keep your money in the CD until the end of the term or lose out on some of the interest earnings.

How to make the most of a 6-month CD

A 6-month CD works well with short-term savings goals. If you want to set money aside for a specific purpose, but you’re worried that you’ll be tempted to tap into the funds, a 6-month CD can help make the money harder to get to. You can keep the money safe in an FDIC-insured (or NCUA-insured) account until it’s needed.

You can also make use of a 6-month CD in an emergency fund ladder. By setting up a CD ladder that includes shorter-term CDs, it’s possible to take advantage of slightly higher yields while knowing that a portion of your money will be available for unexpected expenses in the near future.

Maximize the power of compound interest

Anyone struggling to save money could benefit from having a 6-month CD. Because you could face an early withdrawal penalty, you may be less tempted to tap into your savings prematurely.

In addition to comparing rates, pay attention to how frequently interest compounds. You’ll end up with a higher yield if you choose a bank that compounds interest daily versus one where interest compounds on a quarterly basis.

Things to keep in mind with a 6-month CD

Before you get a 6-month CD, it’s important to understand the potential drawbacks. The early withdrawal penalty is probably the biggest issue. If you access your funds before the six months is up, you’ll pay a penalty.

Plus, the yield often isn’t much higher on a 6-month CD than you’d see with a traditional savings account. You can shop around for the highest rates, but you might need to meet deposit minimums in order to take advantage of the best yields.

Carefully consider your options before you move forward with a 6-month CD.

Best 6-month CD rates, January 2020

Bank APY Minimum deposit
CommunityWide Federal Credit Union 2.05% $1,000
Bellco Credit Union 2.00% $500
HSBC Direct 2.00% $1,000
Nationwide by Axos Bank 1.95% $500
Luther Burbank Savings  1.95% $10,000

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