Best CD rates for February 2023

Top CD rates by term

When you open a CD, selecting a term is an important step. The term is the length of time that the money stays stashed in the account. For example, opening a CD with a one-year term means you’re making a commitment to the bank that you’ll keep your money in the account for one year.

Here’s where you’ll find some of the top yielding CDs by term. (Note: Annual percentage yields (APYs) shown are as of Jan. 31, 2023, and may vary by region for some products.)

National average interest rates for CDs

Researching average interest rates provides insight into the CD rate environment and can help in finding a CD with a yield that's much higher than average.

Here are the current average rates for the week of Jan. 25, 2023, according to Bankrate's weekly survey of institutions:

Note: Average APYs are shown. See the table at the top of the page for APY comparisons.

How to choose a CD

CDs are a good option for longer-term goals or for money that you’re comfortable locking away for a set period of time.

A CD can help you save for longer-term goals when you know just when you’ll need this money in the future. Follow the steps below to choose the right CD for you:

1. Determine what the money will be earmarked for. An emergency fund, a short-term goal or money you’re not sure when you’ll need might work better in a high-yield savings account or money market account. You may also want to consider a no-penalty CD.
2. Figure out when that money will be needed and decide your risk tolerance for the funds. Money that needs to be safe and can’t be lost should usually be in a Federal Deposit Insurance Corp. (FDIC) account that’s within FDIC limits and guidelines.
3. Pick a term that aligns with your savings goals. Terms can range from just a few months to several years.
4. Shop around and compare rates. You’ll want to research banks and credit unions, to find the best rates and make sure the minimum opening deposit is in line with how much you’re putting in this CD. Generally, rates are highest at online banks, but it’s possible for a brick-and-mortar bank or a credit union to offer a competitive yield.
5. Open the CD and deposit the funds into your account.

What to know about CDs

Bankrate regularly analyzes banks, gets insights from top financial experts, and compiles industry data to provide the information you need to make an informed financial decision when selecting a CD.

What is a CD and how do they work?

A CD is a type of account offered by banks and credit unions that pays interest on a deposit amount for a set period of time. These accounts typically pay a guaranteed fixed rate of return for the duration of the CDs term. 

Generally, the longer the term, or amount of time you agree to lock up your money, the higher the interest rate. However, withdrawing your money before the term ends will likely result in an early withdrawal penalty.

Types of CDs

Financial institutions offer a wide range of CDs to fit different financial situations. Take time to consider which type of CD is best for you.

Traditional CDs

Traditional CDs are the most common and have a fixed APY for the CD’s term. These CDs usually don't let you deposit additional funds before the CD matures and also tend to have strict early withdrawal penalties.

When this CD makes sense: You know exactly when you need the money and there’s no chance you need it before. Great for CD ladders or another CD investing strategy where timing is important.

No-penalty CDs

Traditionally, CDs are known as time deposit accounts. So if you withdraw from a CD before it matures, you’ll usually incur a penalty that’s equal to a certain amount of interest earned during a period of time. For instance, a bank may impose a penalty of 90 days of simple interest on a one-year CD if you withdraw from that CD earlier than a year. However, some banks offer no-penalty CDs — also known as liquid CDs — which allow you to withdraw your money early without having a penalty fee cut into your interest earnings. 

A bank may require that you wait at least some time, generally around six or seven days, before you’re able to withdraw from a no-penalty CD and some banks may not allow for partial withdrawals. No-penalty CD rates tend to be lower than regular CDs but can be higher than some high-yield savings accounts or money market accounts.

When this CD makes sense: You’re mostly confident that you won’t have to withdraw the money before the CD matures, but you want to keep some flexibility in case you have to tap it. As a result, you’re willing to give up a little return for added liquidity.

Bump-up CDs

These types of CDs allow you to request an increase in your rate during the CD term under certain conditions. Institutions that issue this CD option usually only allow one bump-up per term. For example, imagine purchasing a three-year CD at a given rate, and one year into the term, the bank offers an additional half-point rate increase. With a bump-up CD, you're allowed to request a rate increase for the remainder of the term. The disadvantage is that bump-up CDs often pay lower initial rates than traditional CDs. 

When this CD makes sense: A bump-up CD could be a good option if rates are expected to rise significantly during the term of the CD. Otherwise, you’re likely accepting a lower rate for limited potential upside.

Are CDs safe?

CDs at either a FDIC-insured bank or at a credit union regulated by the NCUA and insured by the NCUSIF are safe as long as it’s within insurance guidelines. These accounts are safe at online banks, brick-and-mortar banks and credit unions because they’re backed by the full faith and credit of the U.S. government. Just make sure you’re not exceeding the insurance limits. The standard insurance limit is $250,000 per depositor, per insured bank, for each account ownership category at an FDIC-insured bank. For federally insured credit unions, the standard share insurance is $250,000 per share owner, per insured credit union, for each account ownership category.

Who should get a CD?

Someone looking for a low-risk place to stash cash and get a guaranteed rate of return should consider getting a CD. They can be good, safe investments for short- to medium-term goals, like saving for a new car or for a down payment on a home.

• Time specific goal-setters: For a person looking to buy something in two years, an 18-month CD could be a great option. Just make sure you definitely won’t need that money during the CD term or else you could get stuck paying a costly penalty for not leaving the money in the account. 
• Low-risk investors: Instead of guessing what direction savings account yields will be heading in a few years, you can calculate your interest earnings right away with a CD. 
• Impulse spenders: A CD, with its early withdrawal penalty, can help prevent you from spending your money. 

Pros and cons of CDs

Before you choose a CD, weigh the pros and cons to ensure you're making the right investment choice for your financial situation.

It's important to consider the interest rate you're getting, how often the interest compounds and whether you're more comfortable with a CD from an online bank or from a traditional institution with branches. 

Here are some of the pros and cons of CDs:

CDs vs. other savings accounts

CDs vs. traditional savings accounts

Savings and money market accounts are more liquid than CDs. That means the funds you store in those types of accounts are easier to access and have fewer withdrawal penalties and limitations. This makes savings accounts better for your emergency fund. You could withdraw the savings you’ve stashed in a CD, but be prepared to pay a penalty if you take your money out before the CD’s maturity date (unless you’ve purchased a no-penalty CD).

CDs vs. high-yield savings accounts

At some banks, it’s common to see a one-year CD with a higher APY than a high-yield savings account. 

The differences between CDs and high-yield savings accounts are: 

• A high-yield savings account is generally liquid, meaning you can usually withdraw money without a fee. A CD usually has an early withdrawal penalty. (A savings account may charge a fee if a certain amount of withdrawals are made during a monthly statement cycle. And it’s possible for a savings account to have an early closeout fee.) 
• High-yield savings accounts generally have variable APYs. While CDs usually have fixed APYs.

CDs vs. money market accounts

The gap between interest rates tied to CDs and savings accounts has narrowed. But CDs are more likely to pay a higher yield than savings accounts or money market accounts.

CDs and money market accounts have some similarities. Both are types of savings products that banks and credit unions offer. Both are considered safe, as long as they’re insured by the FDIC at banks or the NCUSIF at credit unions. Savers opening a CD or money market account might have to meet higher minimum deposit requirements than they would with a savings account.

However, money market accounts offer more liquidity than CDs, often providing the ability to write a limited number of checks per month directly out of the account. Some money market accounts offer a debit card. Those liquidity features aren't something you'll find with CDs.

In exchange for less liquidity, however, CDs typically offer a higher interest rate than money market accounts.

CDs vs. bonds

Investors have a lot to consider when deciding between a CD and a bond. Traditional CDs from banks are insured by the Federal Deposit Insurance Corp. (FDIC), or from the National Credit Union Share Insurance Fund if you’re getting a CD from a National Credit Union Administration (NCUA) credit union. CDs are safe investments that typically pay a fixed interest rate. In other words, you know how much you’re earning upfront. You’re also guaranteed to receive that amount of interest for the term and get your full principal amount back, as long as you don’t make any premature withdrawals. 

If you’re interested in having more flexibility and you want the chance to earn a higher yield, you may want to consider investing in a bond. A bond is a loan you make to a government or a corporation to receive a rate of return. You can sell a bond before it matures without getting hit with an early withdrawal penalty, but you may get back more or less than your original investment if interest rates have moved. With municipal bonds, the interest you earn is often exempt from taxes.

There are many different types of bonds, and some are riskier than others. Bonds aren’t protected by FDIC or NCUSIF insurance like CDs are. And the value of your bonds will vary depending on what’s happening with interest rates. If interest rates are rising, the price of your bonds will likely fall and vice versa.

Research methodology

Bankrate’s editorial team regularly updates rates featured on this page about every two weeks. We mainly look for the highest APYs and break ties using the minimum balance to open a CD. Bankrate’s editorial team has reviewed nearly all of the banks and credit unions that it tracks, and researches rates weekly for more than 70 popular banks and credit unions. These institutions were selected because they offer competitive APYs, are larger (based on the amount of deposits or assets), frequently appear in internet searches or other possible factors. These banks and credit units typically offer accounts that are available nationwide. All of these banks are insured by the Federal Deposit Insurance Corp. (FDIC) and all of the credit unions are National Credit Union Administration (NCUA) credit unions, insured by the National Credit Union Share Insurance Fund (NCUSIF). Choosing an FDIC-insured bank or NCUA-backed credit union ensures your money is safe as long it’s within insurance limits and guidelines.

Banks we monitor

These financial institutions are featured in our CD rate research:

Bank5 Connect, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, Bread Financial (formerly Comenity Direct), BrioDirect, Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Credit One Bank, Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, Huntington National Bank, Investors Bank, Investors eAccess, KeyBank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, U.S. Bank, UFB Direct, Union Bank (California), USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.

Note: Bankrate doesn’t include callable CDs or brokered CDs on this page and compares regular CDs and no-penalty CDs separately.

How we determine the national average rates

The "Bankrate.com National Average," or "national survey of large lenders," is conducted weekly. The results of this survey are quoted in our weekly articles and national media outlets. To conduct the National Average survey, Bankrate obtains rate information from the 10 largest banks and thrifts in 10 large U.S. markets. In the Bankrate.com national survey, our Market Analysis team gathers rates and/or yields on banking deposits, loans and mortgages. We've conducted this survey in the same manner for more than 30 years, and because it's consistently done the way it is, it gives an accurate national apples-to-apples comparison.