CD Rates in Rhode Island for May 2025

While local banks and credit unions may periodically offer higher CD rates, online banks and nationally available credit unions consistently provide the most competitive yields. These institutions often have lower overhead costs compared to traditional brick-and-mortar banks, which allows them to offer higher returns to their customers.

Some of the top online banks with competitive CD rates include Ally Bank, Marcus by Goldman Sachs, and Discover Bank. These banks provide a range of CD terms with consistently high APYs and often have no minimum deposit requirements.

Among credit unions, Alliant Credit Union and Navy Federal Credit Union are known for their CD rates. Although credit unions may have specific membership requirements, they are generally easy to join for most individuals.

There are three main components you should consider when choosing a CD: the term length, the yield and the penalty for early withdrawal. 

Choosing the CD term

A CD term is the length of time your money is slated to stay within the account. Terms typically range anywhere from three months to five years, though some banks offer terms as short as seven days to as long as 10 years, even longer than a decade. To find the right term for you, consider how long you can park your cash in the account without needing to withdraw it. Unless you're opening a no-penalty CD, you'll likely need to pay a penalty for withdrawing your money before the CD's maturity date.

You'll also want to consider the minimum opening deposit when choosing your term. While some banks don't have a minimum deposit requirement, others may ask for a relatively standard $500 or $1,000 minimum deposit. If you're interested in a jumbo CD, you'll typically need $100,000 to open an account. 

Choosing the yield

Getting the best yield is probably the most important factor for most consumers when choosing a CD. The annual percentage yield (APY) is the total amount of interest you will earn on a CD over one year, taking into account compound interest.

But choosing a CD based solely on the highest yield may not always be the right move. If you suspect you may need to withdraw your money before a CD matures, you'll likely need to pay an early withdrawal penalty, which could even eat at some of your principal (the money you originally invest in a CD). 

Mind the early withdrawal penalties

Banks typically impose an early withdrawal penalty if you withdraw some or all of the principal before a CD matures. Early withdrawal penalties range widely from bank to bank. A relatively standard early withdrawal penalty for a 12-month CD could range anywhere from three to six months' worth of interest. And some banks may even impose a flat fee on top of that penalty, further ratcheting up the cost of withdrawing from a CD before maturity. 

Here, you'll want to consider your risk tolerance, balancing the term and the yield with the associated penalty. If you're more likely than not to withdraw early, you may want to consider a CD with a lower yield but a softer penalty. 

To find the best CD rates in Rhode Island, begin by evaluating the options available at your current bank or credit union. Take note of the APYs, minimum deposit requirements, and early withdrawal penalties for different terms.

Compare these rates to those offered by online banks and credit unions. Focus on consistently competitive yields rather than short-term promotional offers.

Finally, consider your financial objectives and risk tolerance. While the highest APY may be appealing, ensure that the term length and early withdrawal penalties align with your situation.